Parents with Bad Credit Can Get Student Loans, But Are They Really Necessary?

If you have bad credit, finding funds to help your student get through college or a university may be fraught with frustration, but there are many other venues for providing assistance. Stafford Loans, Perkins Loans, and PLUS Loans are the best starting point in gathering education funds for your student. A Stafford Loan does not have any credit requirement, so make an application there first. It will offer a better interest rate than private lenders can. Then you will want to check other federally subsidized loans such as Perkins and PLUS loans. Parents can apply for a federal PLUS loan. The benefits of the PLUS loan include a low fixed rate and favorable repayment termsPrivate LendersIf federal financial aid and scholarships are not enough, you can investigate private student loans, which are non-need based, credit-based loans for students. Many lenders are willing to extend loans to students, even if the parents do have bad credit. The most significant consideration will be steady employment with a decent salary, that usually counterbalances any problems you have with your credit history. You are unlikely to receive a point-blank refusal.Lender CompetitionIn fact, some lenders may even compete for the privilege of offering your son or daughter financing for their higher education. Another thing the lenders will consider is that student loans usually cannot be discharged in bankruptcy declarations, making them a safe and lucrative enterprise. If your student is able to get a private loan but needs a cosigner, offer to cosign. This can help despite your bad credit because lenders will see that you are backing up your student and they may even offer lower interest rates and fees.Credit CardsIf you happen to have credit cards in spite of your poor credit history, they can be an avenue to helping your student as well as bringing up your credit scores. Hand over the credit card for textbooks, supplies, fees, and other life expenses. Then just make payments on time and always more than the minimum amount. This will help your student with most life expenses and give you the opportunity to improve your credit history.Collateral LoansAs with the judicious use of credit cards, a collateral loan can afford you the wherewithal to help your student and start repairing your credit ratings. If you have equity in a house, or even have a late model vehicle, you can put those up for security on a loan for educational costs. Make your payments on time, as specified in your contract, and your credit scores will advance while the education of your child advances, too.Low Income May Be a HelpIf you have exhausted every avenue of student financing, consider that there are programs for students who come from homes that are financially challenged. Check to see if your student is eligible for financial aid or need-based scholarships or subsidized loans. Parents and students should visit the financial aid office of the prospective institution of higher learning and seek help from financial advisers and counselors. They will be able to point you in directions you may not have considered.Do Not Give UpWith work, student loans for parents with bad credit can be obtained, and barring student loans, there are other methods of helping your children get an education. Anyway, you are unlikely to receive flat refusals.