Some borrowers have difficulty obtaining student loans for parents with bad credit.
The issue of credit and student loans has always been fraught with uncertainty and questions.
However, you do not have to worry.
Student loans for people with bad credit are possible as long as you know your options.
Getting Student Loans for Parents with Bad Credit
This post was originally by FinancialWellness.org and share with permission
1. Maximize Your Federal Loans
The best option is federal student loans.
The reason is that their interest rates are the lowest, and they have repayment plans which are very flexible.
Among the federal student loans are the Stafford loan and the Perkins loan.
These two have 5.05% and 6.8% fixed interest rates, respectively.
The parent’s credit history is not required to be eligible for the federal student loans, and the same goes for the students.
As for parents, you can apply for the federal PLUS loan.
In this program, parents are allowed to borrow on behalf of their child who’s an undergraduate, even if credit is denied by other lenders.
2. Look Into Private Student Loans
After exhausting all federal financial aid options, this would be the best time to consider applying for private student loans.
Some banks, however, may offer higher interests and require additional requirements compared to others.
You can opt to check interest rates and other offers available from different banks or institutions to get the best possible option for you.
(Did you know? Consolidation and Refinancing are some of the best ways to tackle down Private Student Loan Debt since they open up better repayment options borrowers can take advantage of. Learn how you can use a Private Student Loan Consolidation to get better options with the 6 Things To Consider Before Consolidation Private Student Loans. Get the details and free download here.)
3. Consider Getting a Co-Borrower
You may ask one of your willing relatives or family members to back up your loan.
There are several education loans which offer loan options for parents along with a co-borrower.
This option is one of the best considering you’ll have access to unsecured and the best education loans available.
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Having parents with bad credit is not the end of your dream of getting a college education.
The options available for securing student loans for parents with bad credit are open to everyone.
More importantly, there is no fixed way of finding the means for attending college.
As long as it is legal, safe, and smart, you may use it to achieve your dreams.
Do you have other advice for securing student loans for parents with bad credit? Let us know in the comments section below.
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