No Checking Student Loans

Going to college can be one of the most exciting times in your life, it’s a time when you can spread your wings and “fly” from the family nest to start your life by yourself. Besides being exciting it can also be quite scary where you know that you must learn to fend for yourself. The one consideration that often scares new university students is how they are going to find the money to survive let alone pay for your student fees.

Some lucky students will have their school fees paid for by their parents but most do not have this luxury. This is where student loans come in. Loan facilities for students are quite unlike financing options for other items like cars or homes. Most of the time the application and approval of student loans are considerably less affected by credit scores compared to other loans from the same lender. Most people don’t know this and refrain from applying for student loans plainly on the basis that they might have been turned down for a previous loan or they might have a bad credit loans history. That simply isn’t a proper excuse. If you are a student and are looking to further your studies with assistance then you should do all you can to obtain a student loan. There is of course no guarantee that you will be approved of the loan but since there is no harm in trying not doing so is rather silly. Why don't you give it a shot and see what the outcome is.

There are many places that you can look to get student loans. Most of the time the first place to look is your own local bank or credit union. Most local banks would have their own student loan programs in place which are more or less the same as any other loan product tat they have. Some banks even have a federal student loan program which is sponsored and guaranteed by the federal government. Most of the time the bank’s own private loan program will have a credit score requirement that is only slightly more lenient compared to other loans. In this particular situation it would make more sense to look a the US federal government programs.

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.