Best student loans for bad credit or no credit in April 2024
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“Verified by an expert” means that this article has been thoroughly reviewed and evaluated for accuracy.
BLUEPRINT
Updated 4:00 p.m. UTC April 8, 2024
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While most federal student loans don’t require good credit to qualify, the rules are different with private student loans. Many private lenders require that borrowers have good credit (typically a score of 670+).
But if your credit isn’t great or you have no credit, you could still have options. Many lenders will let you apply with a co-signer and some even have different types of loans that aren’t credit-based.
When choosing these lenders, we considered factors like interest rates, available loan terms, fees and discounts, whether they accept co-signers and more. Here are our picks for the best student loans for bad credit or no credit in 2024.
Best private student loans for bad or no credit
- Ascent: Best for discounts and rewards.
- Funding U: Best for thin credit.
- A.M. Money: Best for income-based repayment.
- Prodigy Finance: Best for international students.
Consider federal student loans first
It’s generally best to consider federal student loans before private student loans. This is mainly because federal student loans provide federal benefits and protections that private student loans don’t. Interest rates can also be lower for federal student loans — especially for borrowers with less-than-stellar credit. Additionally, most federal student loans don’t require a credit check, which makes them a good option if you have bad or no credit.
Here are the three main types of federal student loans to consider:
- Direct Subsidized Loans are available to undergraduate students with financial need. Additionally, the government covers interest that accrues on subsidized loans while you’re in school at least half time, during your grace period and during any deferment periods.
- Direct Unsubsidized Loans are available to undergraduate, graduate and professional students and don’t require financial need for eligibility. Keep in mind that you’re responsible for all the interest that accrues on an unsubsidized loan.
- Direct PLUS Loans come in two categories: Parent PLUS Loans for parents covering their children’s education costs and Grad PLUS Loans for students paying for grad school. Unlike subsidized and unsubsidized loans, PLUS Loans require a credit check, and you can’t have an adverse credit history to be eligible. You might still qualify with adverse credit if you have an endorser (similar to a co-signer) or can show extenuating circumstances that led to your credit situation.
Laurel Road
Compare the best private student loans for bad or no credit
| FIXED APR | VARIABLE APR | MIN. CREDIT SCORE | ACCEPTS CO-SIGNERS? | |
|---|---|---|---|---|
Ascent(non-co-signer, outcomes-based loan)
| 12.90% to 14.89%
| 13.26% to 15.20%
| No specific minimum (outcomes-based loan only)
| No (yes for other types of loans)
|
Funding U
| 7.49% to 12.99%
| N/A
| No specific minimum
| No
|
A.M. Money
| 8.34% to 8.87%
| N/A
| No specific minimum
| No
|
Prodigy Finance
| N/A
| 11.18% minimum (rate will depend on your future earning potential, loan amount and term)
| No specific minimum
| No
|
All rates include autopay discounts where noted by the lender and are accurate as of April 8, 2024.
Methodology
Our expert writers and editors have reviewed and researched multiple lenders to help you find the best student loans for bad or no credit. Out of all the lenders considered, the five that made our list excelled in areas across the following categories (with weightings): loan details (10%), loan cost (40%), eligibility and accessibility (30%), customer service experience (15%) and ease of application (5%).
Within each major category, we considered several characteristics, including available loan repayment terms, annual percentage rate (APR) ranges and applicable fees. We also looked at minimum credit score requirements, whether each lender accepts co-signers and if they offer co-signer release. Finally, we evaluated each provider’s customer support options, borrower perks and features that simplify the borrowing process like mobile apps.
Why some lenders didn’t make the cut
Of the private student loan lenders that we reviewed, only a fraction made the cut. The lenders that didn’t have high enough scores to be included received lower ratings due to having stricter credit qualifications or not disclosing their minimum credit score requirements. Some also scored lower based on poor customer reviews.
Federal vs. private student loans: Which are a better fit?
Federal student loans
If you need to borrow money for school, federal student loans issued through the Department of Education are usually the best option. These loans provide several borrower benefits and protections, such as access to income-driven repayment (IDR) plans and student loan forgiveness programs.
Most federal student loans don’t require a credit check, so you could still qualify with poor or limited credit.
Understanding the FAFSA
To apply for federal loans, you’ll need to complete the Free Application for Federal Student Aid (FAFSA) at StudentAid.gov. You’ll provide both your personal and financial information on the FAFSA, which will help your school determine how much federal aid you qualify for.
The FAFSA is launched each October 1 for the upcoming academic year and remains available through June 30 of the academic year. For 2023-2024, the FAFSA opened on Oct. 1, 2022, and you have until June 30, 2024, to fill it out.
Keep in mind that some aid is awarded on a first-come, first-served basis, so be sure to submit the FAFSA as soon as possible. Additionally, some state have their own deadlines — you can check with your school’s financial aid office to see if you need to complete the FAFSA ahead of the federal deadline.
Private student loans
After you’ve exhausted your federal student loan options and applied for any scholarships and grants you qualify for, private student loans could provide any additional funds you need. These loans are offered by private lenders, such as banks, credit unions and online lenders.
You’ll typically need good credit (or a creditworthy co-signer) as well as sufficient income to qualify for a private student loan. There are also some lenders that offer loans based on your education, future earning potential and other factors rather than your credit — though keep in mind that these loans might come with higher rates compared to good credit loans.
If you’re considering a private student loan, make sure to shop around and compare your options with as many lenders as possible. This way, you can find a loan suited to your needs.
How to apply for student loans with bad or no credit
- Complete the FAFSA. You’ll need to submit the FAFSA to apply for federal student aid, including federal student loans and grants. Your school will use your FAFSA information to determine how much aid you qualify for and will send you an award letter detailing this. You can then decide which aid to accept.
- Apply for scholarships and grants. Scholarships and grants don’t have to be repaid, essentially making them free money to use for education expenses — so it’s a good idea to apply for as many as you can. There are a wide variety of awards available, such as LGBTQ+ scholarships, merit-based scholarships and more. You can use sites like Fastweb and Scholarships.com to easily search for awards that you might be eligible for.
- Consider private student loans. If you need additional funding for college, private student loans could help to fill the gaps. Be sure to shop around and compare your options with multiple lenders to find the right loan for you. After you’ve found a lender you like, you’ll need to submit an application. Be prepared to provide your personal information and information about your school. If you’re approved, the funds will be sent to your school, and any remainder will be refunded to you.
Tips for improving your credit score while in school
Improving or establishing credit while you’re in college can help open doors for you after graduation. For example, you’re more likely to qualify for loans and credit cards with good credit. Your credit can also impact getting approved to rent an apartment and finding affordable car insurance.
Here are some tips that could help you build your credit while you’re still in school:
- Become an authorized user. If you have a trusted family member or friend with great credit, consider asking if you can become an authorized user on their credit card account. As an authorized user, your credit will benefit from their positive payment history without you even needing to use the card — though keep in mind that if they miss a payment, it can hurt your credit.
- Apply for a secured credit card. Unlike a traditional credit card, a secured credit card requires a cash deposit to act as collateral. The amount you deposit will also be the amount of your credit line. As you use the card and make on-time payments, you could see a boost in your credit. Additionally, the credit card issuer might upgrade you to an unsecured card after a period of on-time payments and will refund your deposit.
- Apply for a credit-builder loan. Another option is getting a credit-builder loan. This is a type of small, short-term loan offered by lenders specifically to help you build your credit. Like with a secured credit card, making on-time payments on a credit-builder loan can improve your credit over time. Additionally, your payments will be deposited into a dedicated savings account. Once repayment is complete, you’ll get your money back minus any interest or fees.
- Pay all of your bills on time. Your payment history makes up the biggest part of your FICO credit score. Aim to pay all of your bills on time and in full each month to build a positive payment history and improve your credit.
- Keep your credit utilization low. Another major factor of your credit score is your credit utilization. This is the amount of credit you’re using on revolving credit lines (like credit cards and lines of credit) compared to your total credit limits. It’s generally recommended to keep your credit utilization ratio below 30% to avoid damage to your credit — but the lower the amount of credit you’re using, the better.
Frequently asked questions (FAQs)
It may be possible to get student loans even if you don’t have a credit score. You typically won’t undergo a hard credit check when applying for federal student loans, though you can only borrow up to a certain amount. If you need to borrow more, you may need to turn to a private lender.
Many private lenders have set credit score requirements, so applying with a co-signer or co-borrower could increase your chances of approval if you don’t have good credit on your own.
You could potentially get a student loan with no co-signer and no credit. Look into federal loans first, as you don’t necessarily need a credit score to qualify. Those who need to borrow a larger amount than what federal loans offer might look into a private lender that looks at factors beyond your credit in its lending decisions.
There’s no credit score requirement if you’re applying for federal loans, but private lenders typically want to see a credit score of 670 or above. If you don’t have the credit to meet a lender’s requirement, you can apply with a creditworthy co-signer who does.
Yes, it’s possible to get a student loan without a credit check. For example, most federal student loans don’t require a credit check. There are also some private lenders — such as Funding U — that might review your credit history but have no minimum credit score requirements to qualify for a loan.
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