Student Loans With Bad Credit: No Credit Checks Make Approval Easier


It is generally accepted that those of us with low credit scores are at a disadvantage when it comes to trying to secure a loan. It is not so much that the score kills the application in its tracks, but the overall consequences of it. For students, applying for student loans with bad credit without the worry of credit checks is a welcome development.

The fact is that no credit check student loans make it easier for students to secure funding for their college education - though there is no guarantee of approval either. There are other factors taken into account before that is achieved.

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Of course, loan sources for students are both from the private lending sector and the public sector. Some student loans approved with bad credit in both of those sectors are granted with no credit checks, but individual students should make sure to find out which source suits them best.

What Bad Credit Ratings Can Do

The advantages of student loans with bad credit are no mystery at all, but there is a long history of loans being turned down with credit ratings an influential part of the assessment. Low credit scores are never enough to guarantee rejection, but they can effect interest rates and loan limits.

Lenders are offering no credit check student loans, not because of the influence credit scores have, but because one fixed rate for everyone can be applied. The law of averages suggest that most students securing this loan will be either no worse off, or better off.

This is because a very low rate of 400, for example, will mean an interest rate higher than an average rating of 600 would. The majority of student loans approved with bad credit are to students with very low ratings, so they are charged a better rate in the long run.

Factors to Keep in Mind

Of course, there are some compromises that need to be made. For a start, the interest rate associated with student loans with bad credit are higher than similar loans would be. The reason is the degree of risk the lender is under. After all, by ignoring the credit history of applicants, they leave themselves exposed to those who are habitual defaulters.

Also, depending on which lender the borrower has gone to, extra fees may be charged to compensate a repayment delay on the loan principal. This is because a no credit check student loan can sometimes not require repayments until after graduation, with just the interest to be repaid. However, a small fee may be charged for that convenience.

A third point is that should there be no interest to pay either until after graduation, a huge debt awaits graduating students. Again this depends on who the lender is and the terms their student loans approved with bad credit have.

The fact that the loan may have been approved with no interest in credit history, means that the borrower may very well be over-extended by the time of graduation.

Where to Get Them

Traditional lenders rarely offer no credit check loans, so they are unlikely to provide student loans with bad credit with the trait. Online lenders, on the other hand, are well-advanced in offering check-free financing, with it being a major marketing advantage over the traditional banks. So a no credit check student loan from a private lender is most likely to be found online.

The most common source is public lenders, with the governments offering loan programs to students in severe financial trouble. Their students loans approved with bad credit ignore credit ratings, but there is usually a limited number available, so applying early is advisable.


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