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Student Loans for Bad Credit
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These days student loans are available even to people with bad credit. With the cost of education increasing there are a number of student who cannot keep up with the educational expenses and would need financial aid. Students with bad credit can also be in need of bad credit student loans. But with bad credit student loans the interest rates on the loans would be a bit higher. Hence before you decide on taking the student loan you should get information on the loan.
When giving out student loans the US Department of Education gives out Stafford Loans that would not take into consideration the credit rating of the student. The authorities consider that the students who go for further education would have come directly from high school and this would mean that they would not have a credit rating. When giving out Stafford loans the credit rating is not taken into consideration by the department of education. The same strategy is applicable for Perkins Loans also. Perkins loans are also federal loans that are offered to impoverished students. The only way in which the student can get into bad credit is by failing to pay off any previous student loan.
There are different types of loans that are available to people with bad credit. These types of loans include:
Stafford Loans: these loans are given out by the federal government and are given to students who have got admission into a certified institute. These loans can be subsidized or un-subsidized. When taking a subsidized Stafford loan the interest is charged only when the student starts repaying the loan but with an un-subsidized Stafford loan the interest rate is charged soon after the loan is given out.
Perkins Loans: the school gives out these loans. For getting these loans the student is supposed to be registered with a certified educational institute.
PLUS Loans: these loans are given to parents to fund the education of their children. For getting these loans the student should be registered with a recognized educational institute. With PLUS loans the parents are liable to pay off the loan on behalf of the children.
Other than the loans the students can also grants in case they have a bad credit. Grants ate financial assistance that doesnt need to be paid back. For being eligible for grants the government focuses on the financial need and the failure to obtain finance through any other source. The grants are given on a first come first serve basis.
When students apply for loans with more than one lender they would get different interest rates and terms of repayment. With the help of student loan consolidation you can combine all the student loans into one loan. When you consolidate your student loans you would be making only one payment and the interest rate for this loan would be lower as compared to the cumulative interest rate that you would be paying on the loan.
If you want to get information about the bad credit student loan and student consolidation programs then the best time is to get the information is in junior high. For knowing the exact amount of loan that you want to take you should start listing out the schools where you seek admission. You should plan out your bad credit loan well in time to get it easily and at better interest rates. With the help of bad credit student loans you can pay your tuition fees on time and these loans are extremely helpful for students when the educational institution want the students to pay their fees on time.
Students can also avail scholarships despite the bad credit history. Students who have been performing well throughout high school can apply for scholarships and if they get full scholarship then they dont have to apply for any loans. But this is not possible for everyone. Many times it happens that the students qualify for partial scholarships. The reasons being the scholarships are not funded properly and also it depends a lot on the luck whether the student gets a full scholarship or a partial one.
When taking a bad credit student loan you should consider assessing the repayment terms. These terms differ from one lender to another just like the interest rates. The repayment terms are the instructions which the lender gives to the borrower regarding the payment of the loan. These would comprise options like automatic withdrawal, or making payments using stubs, the time period that would be allowed for the payment of the loan. Good repayment terms even with a little higher interest rate would be the best deal that a person can get.
The interest rates also play an important role in helping the student select the bad credit student loan option. The interest is the extra amount that you pay on the loan amount. This is paid for the lenders services and the interest is calculated on the total amount of the loan that is borrowed. People generally jump for loan offers with a lower interest rate but forget to look at the repayment terms. There are times when the loan with a higher interest rate also offers a good deal with good repayment terms.
For applying for a federal student loan you should be fast in making a decision. You should get all the information well before time and apply for the student loan well in time.
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