Some Student Loans Available For Those With Little Or No Credit

Posted May 24, 2010 – 12:15 pm in: Loans
     

Student loans are available to those looking to further their education, even if they have little or no credit. In addition to paying for your education, student loans are a good way to build credit once they are paid off.

These federally funded are available through your school and credit isn’t normally an issue. The Stafford loan is one such option. Most lenders do not check a student’s credit history when they apply for a Stafford loan.

Perkins loans are also available to students, and credit history is not taken into consideration. Perkins loans are funded by the government and awarded to those deemed to have the greatest need. Availability is limited.

Perkins and Stafford student loans are a set amount to be awarded each year. Another option for education are PLUS loans. PLUS loans are government sponsored loans for parents of students.

With these government-backed loans, lenders do not look at the applicants credit score. The lender could be a financial institution or the government itself. The lenders do take in consideration your credit history. They check to see if you have been late on any payments or are in default. This may prevent you from receiving a loan.

With federally funded loans, you have the option of deferring them in case of hardship or other issues. The loans provide very low interest rates, but must be repaid.

If a borrower falls behind on their payments, the government can act as its own bill collector. It has the power to confiscate federal tax refunds and garnish wages.

If you declare bankruptcy you’re still not off the hook with your student loans. Student loans are usually not forgiven when bankruptcy is declared. If you are searching for a way to fund your education, government backed student loans are a good option. They will help you get a diploma and establish credit.

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