Bad Credit Student Loans: What Should You Do?
Going to college is a very expensive business and most students resort to taking out loans to fund part of the process. If you are worried about not being able to take out a new student loan now that you are off to college, because you have a bad credit history then do not despair because there are ways around this. Even if you no longer qualify for certain loans there are various options that are available to you that if you find yourself in need of a bad credit student loan. There are Federal Stafford Loans, Perkins Loans, Pell Grants and other kinds of grants and scholarships.
Bad Credit Student Loans: What Do You Need To Disclose?
The good thing about these options is that it doesn’t matter how bad your credit score is as they are not based on a credit check, so you won’t have to answer any questions about your financial status although collateral may be required in some instances but not all.
Bad Credit Student Loans: The Stafford Loan
There are two kinds of federal Stafford loan – subsidized and unsubsidized. These are relevant to all students regardless of their credit history as it is not a consideration. The subsidized Stafford is based on the economic needs of the student and the government pays the interest on the loan. The unsubsidized Stafford Loan is available to every student, regardless of need but the amounts given are not substantial but you can reapply every school year.
Bad Credit Student Loans: The Federal Perkins Loan
This is another loan subsidized by the government which does not require a credit check. Both undergraduate and graduate students can apply with loans of between $1000 and $4000 awarded in any one school year. In total you cannot borrow more than $20000.
Scholarships and Grants
Nearly every state government gives out grants and scholarships as do many professional bodies so it is worth doing some research, depending on your chosen subject, as these institutions will not be interested in your credit history.
Disadvantages of Bad Credit Student Loans
On the whole it is relatively straightforward to get a bad credit student loan. However, interest rates of these bad credit student loans are higher than a normal student loan because of the increased credit risk. If you have to borrow money then make sure you only borrow what you really need. Try not to overstretch yourself as you don’t want to end up in debt forever.
LISA DAVIES
http://www.articlesbase.com/finance-articles/bad-credit-student-loans-what-should-you-do-133555.html
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Should I take out a loan to pay off credit cards and student loans?
The total debt I owe for school and credit cards adds up to about $17,000.
Although I know this is far less then average, I am frustrated with paying high interest, esp. with the credit cards. Should I apply for a loan with my bank to pay it off- and if so, what kind of loan should I go for?
Odds are your student loans are at a MUCH lower interest rate than what a bank could offer you. You could probably get a bank loan at a lower rate than what the credit cards are at though.
So you might consider getting a loan to pay off the cards, but just leave the student loans alone at the low rate and pay them separately.
It’s hard to give you a clear answer without knowing the rates and amounts you have.
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If your student loan interst is tax deductible, dont refinance it. You’re asking for an unsecured loan anyhow– an $17K is probably FAR more than you’ll get with any decent interest rate.
Consider only refinancing credit cards or findign one with a 0% balance transfer option.
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Student loans are generally one of the lowest interest rate devices you can get. Credit cards, not the best. If you can migrate your debt to lower interest, it is always a good thing. Assuming you have the self control to not go and spend up the credit cards again. Go for a unsecured consolidation loan if you can qualify for a good rate.
Just don’t get a HELOC and If you do get a loan, remember not to cancel the credit cards, leaving them open with no balance can help your credit score.
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don’t do it for your student loans.
if you have a home see if a home equity loan is an option
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Considering the national average, you’re right, that’s not bad. However if you decide to go for a consolidation loan, be very careful with the fine print and shop around for the best interest rate possible (preferable lower than the average rate of your cards). I was desperate, and sought a loan through MBNA (now Bank of America) for $9,000. Unfortunately, the interest rate was at 27.99%. They told me at that rate I could pay it off in 4 years at $327/mo. I accepted it only to find out later that it’s more a revolving line of credit rather than a loan. Plus the interest rate killed me since I wasn’t paying the loan off any faster than my normal cards. I transferred half of it back to a credit card with a lower rate and paid the loan balance off first and am now working on paying down the card. Good luck!
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Personal experience
Really the only type of loan that you can apply for if you don’t own a home is an unsecured loan. The interest rates are higher on unsecured loans, but they are fixed and may even be lower than the rates you are paying on your credit cards. I wouldn’t consolidate the school loans with the credit card debt, though, because you probably have a pretty low rate already.
Now, if you own your home, then you can apply for a home equity loan or line of credit. This is the best way to consolidate debt because you will get a much better rate. In this case, I probably would consolidate the school loans if the rate offered on the home equity is lower.
You may want to check with your bank and see if they offer credit cards with low introductory rates on balance transfers.
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If you wish to consolidate visit
http://www.cheap-credit-cards.org/loans/consolidate-student-loans.php
All the best
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