The two main federal student loans programs that are specially geared to borrowers with poor credit ratings. The first is the Stafford loan which is made available to all students as an unsubsidized loan for those without economic needs considerations or as a subsidized loan for those in need of financial helps. The interest rates for the unsubsidized loans range from 4.2 - 6.8% while the subsidized loans will have a lower interest rate of 3.6 – 6.0 %. There is also the federal Perkins loan program which is targeted at the most needy of applicants who can have special terms and conditions put on the loan to ease payment requirements. These loans have their interest rates at about 5%. 

Although federal loan programs have many benefits like a lower interest rate, lower fees, easier repayment schedules etc, there is one defining problem that many students simply can’t ignore. The problem is the limited amounts of money that can be borrowed. A freshman can only borrow up to $3,500 and a sophomore up to only $4,500. This creates a big problem for students as most of the time these amounts simple aren’t enough. Some students have to resort to working or even taking out a second private loan just to cover the shortfall.

There generally aren’t any credit checks when it comes to federal student loans but is a vital requirement for private loans. In order to successfully apply for a private student loan you ill need a FICO score of at least 600-650. Any less you will either have your loan application rejected or have the interest rates go up so high that the loan becomes more of a burden than anything else.

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