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Your credit won't matter if you're getting federal student loans, and federal loans should be your first choice, anyway. But if you need more than what the government can offer, private student loans are your next step. And credit? That plays a big role in the private lending world.
Not only will your credit score determine what private student loans you can qualify for, but lenders will also use it to determine what interest rate you get.
Best Student Loans for Bad Credit of 2024
- Best for flexible term lengths: College Ave Undergraduate Student Loans
- Best for alternative credit assessments: Ascent Undergraduate Student Loans
- Best for no fees: SoFi Undergraduate Student Loans
- Best for credit building: Citizens Bank Undergraduate Student Loans
- Best for international students: MPower Financing Undergraduate Student Loan
- Best for income-based loans: Edly Student Loans
Understanding Student Loans for Bad Credit
What are student loans for bad credit?
Student loans for bad credit are designed for students with credit scores below 580 or little to no credit history. They can typically only be used for approved educational expenses like tuition, textbooks, student housing, and university fees.
How do student loans for bad credit differ from traditional student loans?
The main difference between student loans for bad credit and traditional student loans is the factors that the lender uses when approving loan applications.
With traditional student loans, an applicant's credit score largely determines whether or not the loan application is approved. With student loans for bad credit, lenders place more emphasis on factors like academic performance, college enrollment, and career prospects. This shift in focus can help students with bad credit to get a loan.
Compare the Best Student Loans for Bad Credit
5.34% - 17.99% variable and 3.59% - 17.99% fixed (with AutoPay discount)
late payment of 5% of the amount due, capped at $25
mid-600s
Minimum of $1,000
- No prepayment or origination fees
- International students eligible with an eligible cosigner
- Low APR
- Multiple options for repayment term length
- Many ways to contact customer support
- Credit check required
- Late payment fee
College Ave is a great lender for borrowers who want multiple options for repayment term lengths and are after a low APR. College Ave also offers many options for contacting customer support.
College Ave- Apply through your computer or mobile device
- Customer service available via phone, text, email, and live chat
- Five, eight, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Repayment options available:
- Deferred: No payments for up to six months after leaving school
- Interest only: Only make payments on the loan's interest while in school
- Partial payments: Pay $25 per month while in school
- Full repayment immediately: Start making full payments while still in school
- Loans made through Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC
5.66% - 15.16% variable and 3.69% - 15.04% fixed (with AutoPay discount, varies by plan)
None
Fair to Excellent
$2,001 - $200,000 ($200,000 aggregate total)
- N/A
- N/A
Ascent provides a variety of repayment term lengths on its student loans and low minimum interest rates on fixed-rate loans. You may also qualify for a 1% cash-back reward that will be paid to you after graduation.
Ascent- Loan amounts available: $2,001* minimum, up to $200,000 for undergraduates, and $400,000 for graduates
- *The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.
- Repayment options available:
- Deferred: No payments for up to nine months after leaving school
- Interest only: Only make payments on the loan's interest while in school
- Partial payments: Pay $25 per month while in school
- Immediate Repayment:Begin making full payments (principal + interest) on the loan right away
5.79% - 15.86% variable and 3.79% - 14.83% fixed (with AutoPay discount)
N/A
Undisclosed
Minimum of $1,000
- No origination fees, prepayment penalties, or late fees
- Solid APR
- Several options for repayment term length
- Quick application process
- Credit check required
SoFi is an excellent lender for borrowers who want a competitive APRs. It's also a great lender for those who don't want to worry about fees.
SoFi Undergraduate Student Loans- Apply through your computer or mobile device
- Customer service available via phone, mail, and social media
- Five, seven, 10, or 15 year repayment terms available
- Loan minimum of $1,000, maximum up to 100% cost of attendance
- Loans are originated by SoFi Lending Corp. or an affiliate
5.99% - 16.59% variable and 3.99% - 15.59% fixed
Undisclosed late fee
Undisclosed
Up to $150,000
- No origination fees or prepayment penalties
- Co-signed loans available
- Rate discount for qualifying borrowers
- Multiple options for repayment term lengths
- Solid minimum interest rate
- Multi-year approval available
- Low minimum loan amount
- Late fee
- No option for prequalification
- Credit check required
- Loan minimum is $1,000, maximum is $150,000
- Five, 10, and 15-year repayment term lengths
- Undisclosed late fee
- 0.50% rate discount if you or your cosigner have a qualifying Citizens Bank account at the time you submit a complete application and you sign up for automatic payments
- Multi-year approval allows you to see how much you're eligible to borrow for all the years you are in school when you first apply for a loan
- Loans are originated by Citizens Bank, N.A.
13.74% to 14.75% fixed (with AutoPay discount)
5% origination fee and undisclosed late fee
Undisclosed
$2,001 — $100,000 lifetime
- Lends to international students without a cosigner
- Interest rate discounts for hitting certain requirements
- No prepayment penalties
- Only fixed-rate loans available
- One repayment term available
- High APR range
- Origination and late fees
- Only lends to students within 2 years of graduation from college
You might like MPower Financing if you're an international student without a cosigner. Otherwise, you may prefer another lender for more repayment options and better rates.
MPower Financing Undergraduate Student Loan- 10-year repayment term
- 5% origination fee and undisclosed late fee
- Customer service available by filling out a form or phone
- $2,001 loan minimum, up to $100,000 lifetime loan limit
- 1.5% reduction in your interest rate with automatic payments, six on-time payments, and proof of graduation and employment
- Lends to students for 350 schools
- Loan amounts available: $2,001 minimum, up to $100,000 lifetime limit
- Repayment options available:
- Interest only: Only make payments on the loan's interest while in school, then full payments after a 6-month grace period
- Loans are made by Bank of Lake Mills or MPOWER Financing
N/A
Not Disclosed
up to $20,000
- Repayment terms are based on your income
- Repayment not required until you meet specified income threshold
- Both cosigner and no-cosigner loans available
- No hard credit pull required to pre-qualify
- You can only borrow up to $20,000 (or $25,000 with a cosigner)
- Charges origination fee
- Late fee
- Loans not available in 7 U.S. states
- Repayment terms are based on your income
- No hard credit pull required to pre-qualify
- You can only borrow up to $20,000 (or $25,000 with a cosigner)
- Loans not available in 7 U.S. states
Best Student Loans for Bad Credit FAQs
Yes, you can probably find a student loan lender to borrow from if you apply with a more creditworthy cosigner. Remember that the cosigner will be required to take over payments if you can't cover them.
Some private student loan lenders will approve you even if you have no credit score if you have a cosigner who agrees to share in the responsibility of the loan. The cosigner will have to have good credit.
Yes, you can get a student loan with no credit score. Some lenders may require you to apply with a creditworthy cosigner, while some may not. Cosigners agree to share in the legal responsibility of the loan and must take over payments if you fail to make them.
You may be able to get a student loan with a 500 credit score if you bring in a cosigner on your loan application. Cosigners agree to make payments if you fail to, and they generally need to have good credit to qualify. Many students chose parents, grandparents, siblings, or spouses as their cosigners.
You can get a federal student loan with bad credit and no cosigner, as these loans do not require a credit check. Private lenders may also offer options but typically require a cosigner for the best terms.
The best private student loans for bad credit come from lenders who specialize in working with students who have lower credit scores. These loans may have higher interest rates but can offer flexible repayment terms.
To lower the interest rate on your student loan, consider refinancing with a lender that offers better rates, improving your credit score, or applying with a cosigner who has a strong credit history.
Federal student loans, such as Direct Subsidized and Unsubsidized Loans, do not require a credit check and are available to students regardless of their credit history.
Top Bad Credit Student Loan Company Reviews
Do you need a private student loan but have bad credit or no credit history at all? The best student loans for bad credit will accept lower credit scores or let you use a cosigner to qualify for a loan. Make sure to compare fees and interest rates while shopping around.
Here are our reviews for the best student loans for bad credit borrowers.
Best for Flexible Term Lengths: College Ave Undergraduate Student Loans
College Ave requires a credit score in the mid-600s if you're applying on your own. But with a cosigner, there's no minimum requirement for the student borrower. The company offers fixed- and variable-rate loans, with no origination or application fees. College Ave has undergraduate, graduate, and career loans, as well as loans for those pursuing dental, health, legal, medical, and business graduate degrees.
Regular Annual Percentage Rate (APR): 5.34% - 17.99% variable and 3.59% - 17.99% fixed (with AutoPay discount)
Fees: late payment of 5% of the amount due, capped at $25
Loan Amount Range: Minimum of $1,000
See our College Ave student loans review.
Best for Alternative Credit Assessments: Ascent Undergraduate Student Loans
Ascent is a standout for its "outcomes-based" loans for borrowers without a credit history. These allow you to qualify — often without a cosigner — based on alternative factors, such as your GPA, your major, your graduation date, the cost of attendance at your school, and more. Ascent also offers student loans for international and DACA students and students pursuing MBAs, PhDs, master's degrees, and degrees in dental, law, medical, or health profession degrees.
Regular Annual Percentage Rate (APR): 5.66% - 15.16% variable and 3.69% - 15.04% fixed (with AutoPay discount, varies by plan)
Fees: None
Loan Amount Range: $2,001 - $200,000 ($200,000 aggregate total)
See our Ascent student loans review.
Best for No Fees: SoFi Undergraduate Student Loans
SoFi doesn't disclose its credit score minimums, but it has a wide variety of loan options for borrowers with cosigners. There are also parent loans, which can be used to help a student pay for college expenses, and cosigners can be released as quickly as 12 months in some states. SoFi also charges no fees on its loans.
Regular Annual Percentage Rate (APR): 5.79% - 15.86% variable and 3.79% - 14.83% fixed (with AutoPay discount)
Fees: N/A
Loan Amount Range: Minimum of $1,000
See our SoFi student loans review.
Best for Credit Building: Citizens Bank Undergraduate Student Loans
While Citizens Bank doesn't disclose its credit score minimums — and 99% of its undergraduate student loan borrowers use a cosigner, its Student Credit Builder program makes it worth a look for borrowers with low or no credit scores. This helps you start building your credit score up while still in school and can make it easier to get affordable financing later in life. Citizens Bank also offers multi-year approval (so you don't have to re-apply every school year), and there are several repayment terms and rate discounts available, too.
Regular Annual Percentage Rate (APR): 5.99% - 16.59% variable and 3.99% - 15.59% fixed
Fees: Undisclosed late fee
Loan Amount Range: Up to $150,000
See our Citizens Bank student loans review.
Best for International Students: MPower Financing Undergraduate Student Loan
MPower offers student loans that require no credit, no cosigner, and no collateral. The lender mainly loans to international students, but domestic students can qualify, too, as long as they attend an eligible school. MPower's loans are fixed-rate and go up to $100,000. The company also provides career advice and Visa support letters for those looking to apply for their Visa.
Regular Annual Percentage Rate (APR): 13.74% to 14.75% fixed (with AutoPay discount)
Fees: 5% origination fee and undisclosed late fee
Loan Amount Range: $2,001 — $100,000 lifetime
See our MPower student loans review.
Best for Income-Based Student Loans: Edly Student Loans
Edly stands out from other lenders by offering income-based loans. With this type of loan, you don't have to begin repayments until you hit a $30,000 income threshold. This gives you some leeway to launch your post-college career without facing immediate student loan payments. Edly also makes itself more accessible for applicants by offering no-cosigner and cosigner student loan options.
Regular Annual Percentage Rate (APR): N/A
Fees: 4% origination fee
Loan Amount Range: up to $20,000
Bad Credit Student Loan Lender Trustworthiness
We've only selected student loan lenders with no public controversies in the last three years. We've also compared each institution's Better Business Bureau score.
The BBB is a non-profit organization focused on consumer protection and trust. It evaluates businesses by judging their responses to consumer complaints, and transparency about business and advertising practices. Here is each company's score:
Of these top picks, only Ascent is not currently rated an A or higher by the BBB. Customer experiences vary, so this doesn't necessarily reflect Ascent's trustworthiness overall. You should do your own research and ask others about their personal experiences with the businesses before deciding against borrowing from this company.
Comparing Loan Rates and Terms
Interest Rates for Bad Credit Student Loans
The exact student loan interest rate you'll get varies from lender to lender, and it also depends on your credit score. The higher your credit score, the lower APR you can expect to qualify for.
Most lenders off both variable and fixed-rate loans. With variable-rate loans, your interest rate can change at any time, so while your APR may start off lower than a fixed-rate loan, it will likely go up significantly over the course of your loan. With a fixed-rate APR, the interest rate remains the same from day one until you pay the loan off.
| Lender | Interest Rates |
| College Ave Undergraduate Student Loans | 5.34% - 17.99% variable and 3.59% - 17.99% fixed (with AutoPay discount) |
| Ascent Undergraduate Student Loans | 5.66% - 15.16% variable and 3.69% - 15.04% fixed (with AutoPay discount, varies by plan) |
| SoFi Undergraduate Student Loans | 5.79% - 15.86% variable and 3.79% - 14.83% fixed (with AutoPay discount) |
| Citizens Bank Undergraduate Student Loans | 5.99% - 16.59% variable and 3.99% - 15.59% fixed |
| MPower Financing Undergraduate Student Loan | 13.74% to 14.75% fixed (with AutoPay discount) |
| Edly Student Loans | N/A |
Loan Terms for Bad Credit Student Loans
As you can see, most lenders offering student loans for bad credit have similar loan term ranges. There are a few outliers, though. Make sure you know what terms are available before applying, as your loan term length will impact how much you pay each month. Also note that the longer the term length, the more interest you'll pay over the life of your student loan.
| Lender | Interest Rates |
| College Ave Undergraduate Student Loans | 5 to 15 years |
| Ascent Undergraduate Student Loans | 5 to 20 years |
| SoFi Undergraduate Student Loans | 5 to 15 years |
| Citizens Bank Undergraduate Student Loans | 5 to 15 years |
| MPower Financing Undergraduate Student Loan | 10 years |
| Edly Student Loans | 7 years following graduation |
Fees for Bad Credit Student Loans
Some private student loan companies charge origination fees when you open a loan, along with late fees for falling behind on payments. Make sure you're aware of all potential fees before you decide on the right student loan for you.
| Lender | Interest Rates |
| College Ave Undergraduate Student Loans | late payment of 5% of the amount due, capped at $25 |
| Ascent Undergraduate Student Loans | None |
| SoFi Undergraduate Student Loans | N/A |
| Citizens Bank Undergraduate Student Loans | Undisclosed late fee |
| MPower Financing Undergraduate Student Loan | 5% origination fee and undisclosed late fee |
| Edly Student Loans | 4% origination fee |
How to Get a Student Loan with Bad Credit
It can be difficult to get a student loan — or any type of loan, for that matter — with bad credit. Higher credit scores and strong credit histories often indicate a borrower is good at managing their debts and is, therefore, at a low risk of shirking payments. Low credit scores and spotty credit histories can indicate the opposite.
For these reasons, it may be difficult to qualify for loans without a good credit score. If you can qualify, lenders may give you a higher-than-average rate to compensate for the extra risk.
Fortunately, it's not impossible to get a student loan with bad credit. For one, there are federal student loans, which don't consider credit when determining eligibility or setting rates. You can also look for lenders that offer loan programs for lower-credit borrowers, or you can bring in a cosigner — one with a strong credit profile — on your loan application.
Loan cosigners agree to legally share the responsibility for your loan and will need to make payments if you fail to do so. This offers extra protection for lenders and can make it easier to qualify for a student loan. In some cases, it may mean a lower interest rate, too.
Shopping around for your student loan lender can help, too. Do your research and compare several companies on eligibility requirements, loan amounts, interest rates, repayment terms, grace periods, and even hardship options. These can protect you if you're ever struggling financially and cannot make payments.
How to Improve Your Chances of Approval for a Student Loan for Bad Credit
Tips for Enhancing Your Credit Score
A higher credit score will give you more options as you apply for student loans. You can improve your credit by:
- Paying off your credit card balances
- Requesting increased credit limits
- Paying your bills on time
- Disputing errors on your credit report
Tips to Strengthen Your Loan Application
Here are strategies to improve your odds of approval:
- Request only the funds you need
- Include as much financial information as you can
- Apply after earning a raise (so your income is higher)
- Use a cosigner
- Conduct research and choose the right lender
The Importance of a Cosigner
As an aspiring student, you might not have built a strong credit history or earned a consistent income — factors that can count against you as a borrower. By applying with a cosigner who does have these factors in their favor, you increase the likelihood of having your loan application accepted.
Bad Credit Student Loans Pros and Cons
Benefits of Bad Credit Student Loans
- You're more likely to be approved. The point of a bad credit student loan is to extend eligibility to borrowers who might not otherwise qualify for a student loan.
- You can build credit. By repaying your student loan on time, you'll show your creditworthiness and potentially improve your credit score.
- You can take advantage of the chance to use a cosigner. Many student loans for bad credit require a cosigner, which can feel like a burden, but also increases your chances of getting approved for a loan.
Drawbacks of Bad Credit Student Loans
- Higher interest rates. To offset the risk of lending to students with bad credit, lenders often charge higher interest rates. This means you could spend considerably more in interest as you repay your student loans.
- Borrowing amounts are often smaller. When you get a bad credit student loan, you might not receive as much money as you need.
- Less flexibility when repaying the loan. Most bad credit student loans are private (as opposed to federal), and private student loans generally have less flexible terms than public student loans.
How to Apply for a Bad Credit Student Loan
- Determine how much money you need to borrow. Make sure you consider the entire cost of attendance for your university, including tuition, fees, supplies, books, and housing.
- Complete the Free Application for Federal Student Aid (FAFSA) form. The FAFSA application determines how much federal aid you can receive and is required for applying for federal student loans.
- Compare lenders. Your first option should be to apply for federal student loans, which have no credit requirement. However, you may need additional funds to cover the cost of your education, which is why it's also best to compare private lenders. Pay special attention to interest rates, credit score requirements, and available loan amounts.
- Apply for loans. The FAFSA form counts as your application for federal loans. You'll have to complete separate applications for private lenders, and if you're applying with a cosigner, they'll need to provide financial details as part of the applications.
Alternative Financing Options
Consider these more affordable alternatives to private student loans for bad credit.
Federal Student Loans
Federal student loans are the best option for many students. Eligibility is determined by financial need and student progress, not by credit score. Federal student loans also tend to have more flexible repayment terms than private student loans. You can apply for federal student loans by filling out the FAFSA form.
Scholarships and Grants
Many universities and institutions offer grants and scholarships. Some of these opportunities are given based on financial need, while others are awarded on merit for accomplishments like high grades, athletic prowess, and participation in extracurricular activities. Unlike loans, scholarships and grants don't need to be repaid.
Work-Study Programs
Federal work-study programs allow students to fund their education by working part-time for their university. Work-study jobs often involve around 20 hours of work a week, ensuring students have time to dedicate to their education. Eligibility for a federal work-study job is based on financial need, as disclosed in your FAFSA form.
Why You Should Trust Us: How We Picked the Best Student Loans For Bad Credit
Business Insider's goal is to help our audience make the best decisions possible with their money. So, we researched many student loan lenders, comparing interest rates, terms, fees, and fine print for you.
All student loan products in our reviews and guides are rated on a 1-5 scale. The total rating is a weighted average that considers seven categories, some of which are weighted more heavily than others. They are:
- Interest rate (20% of rating)
- Fees (20% of rating)
- Term lengths (15% of rating)
- Repayment options while in school (15% of rating)
- Borrower accessibility (15% of rating)
- Customer support (7.5% of rating)
- Ethics (7.5% of rating)
Each category is given a weighting that is determined based on its impact on your borrowing experience. For instance, rates and fees are weighted most heavily because they have the biggest impact on the overall cost of your loan. Customer support and ethics are still important parts of the borrowing experience but are not directly tied to the student loan's terms, so they are not weighted as heavily.
Read more about how we rate student loans »
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
Ascent's undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent's Terms and Conditions please visit: AscentFunding.com/Ts&Cs. Rates displayed above are effective as of 8/12/2024 and reflect an Automatic Payment Discount of 0.25% for credit-based college student loans and 1.00% discount on outcomes-based loans when you enroll in automatic payments. The Full P&I (Immediate) Repayment option is only available for college loans (except for outcomes-based loans) originated on or after June 3, 2024. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower's credit history, verifiable cost of attendance as certified by an eligible school, and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. 1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. The AscentUP platform is only available to eligible Ascent borrowers and subject to terms and conditions.
