Student Loans Where No Credit Check is Necessary
Your Credit History Affects Lending
If you have no credit established, as is the case with many new borrowers and college-age students, you are not necessarily excluded from borrowing money toward college. No credit is better than bad, but many institutions require co-signers for either situation.
Good news: here, first, are your college financial aid options that require no credit checks: Federal Stafford Loans, subsidized and unsubsidized, Federal Perkins Loans, other government and state-funded loans, Pell Grants and other government grants, and private grants and scholarships.
Federal Loans: Your First Step
Your best bet for student loans that require no credit check are the Federal Stafford and Perkins Loans. Always apply for these first. They are also low-interest and long-term.
Popular Stafford Loan
The first loan any student should apply for, credit or no credit, is the Stafford Loan. Any financial aid advisor should tell you this. You must apply for federal student loans by filling out the FAFSA (Free Application for Federal Student Aid). The subsidized Stafford Loan is designed for only the most financially needy students. And the government picks up the tab for interest repayment until the borrower has graduated and assumes normal repayment of the loan.
The unsubsidized Stafford Loan is also a non-credit based loan, but this "flavor" of Stafford loan is open to any type of student regardless of financial need. In the case of the unsubsidized Stafford loan, students are responsible for all interest that accrues.
The challenge with the Stafford loans is that in most cases the amount awarded is meager. For this reason the business of alternative or private student loans (credit based) has become big business, along with the consolidation loans necessary to keep borrowers from delinquency and default.
Perkins Loans-Credit-free Campus Based Aid
The Perkins Loan is awarded directly from a college campus to students who prove the greatest financial need and offers annual loans from $1,000 to $4,000 and a nine-month grace period following graduation. Awards provided by Perkins Loans are typically a combination of government funds and funds from the college to which you are applying.
The key to squeezing the most funds from a Perkins Loan if you qualify: apply as soon as possible for the FAFSA and college admission. Schools award Perkins funds on a first come, first served basis—the earlier you get there, the better.
State Student Loans Offer Another Strategy
Another federal loan strategy: find out if your state extends any state-based federal loans. In some cases state governments partner with student loan providers to offer even better deals on federal and private student loans. Don’t miss out on these potentially valuable offers.
Grants and Scholarships Require No Credit Check
The federal Pell Grant is used to assist millions of financially needy students. Because it is a grant there is no credit check attached, but it is exclusively designed for low-income students, so it is a bit limited in this respect—you must qualify to benefit. However, there exist countless other sources for grants and scholarships. Grant and scholarship programs require no credit checks. Scholarships are often awarded on merit and grants on need.
Check with your state government's education fund. There are often state-based grants and state-specific scholarships for which you may be eligible.
Scholarships and Loans for Special Fields of Study
Pursuing a special degree such as business or health sciences? Many organizations and professional societies offer valuable grants and scholarships for students who will pursue certain professions.
Special low-interest no credit check loans for nurses and teachers come straight from the federal government and state-based sources.
**Guess what? Nurse and teacher loan forgiveness programs mayrepay all or part of your student loans. You’ll find similar programs for med and law students. For example, nurses continue to be in short supply and in answer to the impending shortages, the government and private organizations offer nursing students grants, scholarships and student loans, in return in most cases for service in medically underserved areas. The same is true of students studying to be teachers.
Private Student Loans: Finding a Co-Signer
What if you want to explore options for alternative or private student loans? Without a credit check you would need to find a credit-worthy co-signer. No reputable lender will just agree to a student loan without first checking into your financial history; so avoid any company that says it would.
How to Find a Co-Signor
A co-signer is someone you trust and who trusts you and is willing to be your responsible co-borrower in the case you default on your student loan. Many students ask parents to co-sign for them. But if the co-signer's credit is no better than your own, don't bother. You want a co-signer who has the best credit you can get. So if Uncle Charlie's credit is better than Dad's then you might approach Uncle Charlie in regards to co-signing your loan. Good credit makes for lower interest rates, because the risk involved in the loan is minimal compared to the same risk associated with a borrower with less than stellar credit.
- Career Training Loan through Sallie Mae - this is a good example of an alternative loan that offers attractive features and is still available for borrowers with no credit or less than perfect credit with a co-signer.
How to Manage Your Student Loan Debt
You have avoided the dreaded credit check, but what about the future? Maybe you want to go back to school for a graduate degree in a few years. If your student loan repayment is the slightest bit difficult to manage, you should talk to your lender about consolidating your student loans.
Federal Loan Consolidation
Federal student loan consolidation is available without a credit check to anyone with multiple federal student loans. In some cases you may be able to cut your monthly payment in half, even though the deal will extend the term of repayment.
Private Loan Consolidation
Loan consolidation is available for your private student loans. Lenders do not want to see you default on your student loans. To those ends most student loan providers offer competitive student loan consolidations sometimes without a credit check.
How do you know if you are a good candidate for loan consolidation? Take our simple self-assessment quiz and find out right now. Manage your student loan debt responsibly.
