8 Best Bad Credit Student Loans of April 2024

Compare Student Loans

Our Picks for the Best Bad Credit Student Loans

Best Overall

Federal Student Loans

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Vault Verified

Minimum Credit Score

None

APR Range

5.50% – 7.05%

Loan Amounts

$5.5K – $12.5K

Term Length

10 – 30 years

Why We Chose It

The U.S. Department of Education offers four types of student loans meant to help pay for education. Most don’t require a credit check and may even be forgiven, canceled or discharged in some cases.

Pros

• Flexible repayment plans
• Fixed interest rates
• Often less expensive than private student loans

Cons

• Not all students qualify for best features
• Must pay origination fees
• Loans are outsourced to third-party companies

Best for Different Loan Types

Ascent Private Student Loan

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on Credible’s website

Variable APR

6.22% – 16.08%

Fixed APR

4.09% – 15.66%

Loan Term

5, 7, 10, 12 or 15 years

Loan Amount

$2,001 up to total cost of attendance; total maximum of $200,000 for undergraduate loans and $400,000 for graduate loans

Why We Chose It

Ascent offers many different types of undergraduate and graduate private student loans. You can choose credit-based or outcome-based loans and variable and fixed interest rate options. Read our Ascent student loans review.

Pros

• Longer grace period than other lenders 
• Co-signed and non-cosigned loan options
• Long repayment terms—upwards of 20 years, depending on your plan

Cons

• Limited or no options for freshmen and sophomores
• Doesn’t offer parent loans for student
• Part-time students aren’t eligible

Best for International Students

MPOWER Financing

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Vault Verified

Fixed APR

As low as 13.98%

Loan Term

10 years

Loan Amount

$2,001 minimum; $100,000 total lifetime MPOWER borrowing limit

Why We Chose It

Not all private student loan lenders have options for international students, but MPOWER does. You can apply for an MPOWER loan without a co-signer or collateral.

Pros

• U.S. citizenship or residency not required
• Large loan amount options—up to $100,000
• No minimum credit score requirements

Cons

• Required to repay loan while still in school
• No co-signers allowed at all, even to increase your chances of getting approved
• Only repayment term: 10 years

Best for Graduates and Professionals

College Ave Student Loans

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on Credible’s website

Variable APR

5.59% – 16.69%

Fixed APR

4.07% – 15.48%

Loan Term

5 – 15 years

Loan Amount

$1,000 minimum

Why We Chose It

Some lenders don’t offer loans for all kinds of students, but College Ave does. They offer loans for undergraduates, graduates, parents of undergraduates, law school students, MBA students, medical students, and graduate health professionals. Read our College Ave student loans review.

Pros

• Flexible repayment terms
• Borrow up to your cost of attendance—but at least $1,000
• Prequalification lets you see if you’re eligible without completing an application first

Cons

• Long repayment before co-signer release kicks in
• No grace period for parent loans

BEST FOR NO CO-SIGNER

Funding U Student Loans

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on Credible’s website

Variable APR

N/A

Fixed APR

7.49% – 12.99% (with Autopay)

Loan Term

10 years

Loan Amount

$3,001 – $20,000

Why We Chose It

Funding U doesn’t require a co-signer or strong credit. Instead, it evaluates borrowers on more than just their credit history, looking at features like academic achievements and career path.

Pros

• Available to DACA recipients 
• No application, origination, or prepayment fees
• No co-signer required and you can see if you’re eligible with pre-qualification

Cons

• Only available to full-time undergrads
• Not available everywhere
• Monthly payments required while you’re in school and only one repayment term

Best for Merit-Based Loans

A.M. Money

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Vault Verified

Variable APR

N/A

Fixed APR

8.34% – 8.87%

Loan Term

10 years

Loan Amount

$3,750 – $50,000 per year

Why We Chose It

Chicago Student Loans by A.M. Money offers merit-based student loans to upperclassmen and graduate students that don’t require a co-signer. These loans come with a six-month grace period and the option for an income-based repayment plan for up to 36 months if you’re having trouble affording payments.

Pros

• Doesn’t require or accept co-signers
• Offers income-based repayment if you’re experiencing financial instability
• Permits a grace period of six months

Cons

• Not typically available to freshmen or sophomores
• Charges an origination fee of 4.5%
• Has a limited list of eligible schools

Best for Rate Match Guarantee

Earnest

Check Rates

Vault Verified

Variable APR

5.87% – 18.51%

Fixed APR

4.36% –16.15%

Loan Term

5, 7, 10, 12 or 15 years

Loan Amount

$1,000 up to cost of attendance

Why We Chose It

Earnest offers undergraduate, graduate and parent student loans to borrowers (or co-signers) who have a credit score of 650 or higher and an annual income of at least $35,000. This online lender will also match any competitor’s rate and gift you a $100 Amazon gift card once the rate match is complete. It offers a lengthy nine-month grace period. Read our Earnest student loans review.

Pros

• Will match rate you get from a competitor
• No origination, late payment or disbursement fees
• Nine-month grace period

Cons

• Borrower or co-signer must have credit score of 650 or higher
• Loans not available to residents of Nevada
• No option for co-signer release (unless you refinance)

Best for Income-Based Repayment

Edly

Check Rates

Vault Verified

Variable APR

9.40% – 23.00%*

Fixed APR

N/A

Loan Term

84 –144 months

Loan Amount

Up to $15,000 per year with $25,000 lifetime limit

Why We Chose It

Edly offers both co-signed and non-co-signed student loan options with a lifetime borrowing limit of $25,000. Your monthly payments will be based on your income, but you can apply for forbearance if you’re making less than $30,000 after college.

Pros

• Both co-signed and non-co-signed student loans
• Career training loans available
• Forbearance and deferment available

Cons

• Co-signed loans require in-school payments (starting at $25 per month)
• Not available to freshmen
• Not available in Iowa, Colorado, Connecticut, Maine, Nebraska, Puerto Rico, Vermont or West Virginia

*Your APR may change based on your income, as that drives your payment amounts.

Can You Get a Student Loan With Bad Credit?

Federal student loans don’t typically look at credit history, but many private lenders require good or excellent credit. The higher your credit score, the more likely you are to get approved for a private student loan at the lowest interest rate offered. On the other hand, bad credit signifies that you might have had some issues with credit in the past, which can make lenders wary or lead to loans with high interest rates. 

What is Considered Bad Credit?

There are several scoring models that lenders use to evaluate your credit. A FICO score of 580 or lower and a VantageScore of 600 and below are considered bad credit. At this level, your chances of borrowing loan products are lower than people with good or excellent credit. And if you have fair credit, you may also struggle to qualify for anything except bad credit loans.

How to Improve Your Credit Score As A Student

It’s not easy being a student with little or no credit history to your name. But there are some ways you can build up your credit.

1. Become an authorized user on a credit card. You don’t have to use the credit card to reap the benefits from the main user’s account. Their good credit habits help build your positive credit history when your name is added to their card.
2. Get a secured credit card. Your credit limit is your upfront down payment. You can spend as much as your limit and when you pay it off, you get to meet the maximum again. Do this for a few months while making on-time payments and you might qualify for an unsecured credit card, which doesn’t require a deposit.
3. Make on-time loan payments. Your payment history plays a large role in your credit score and report. Avoid late payments that can drop your score and lead to negative marks on your credit report for years. 
4. Report hard work to the credit bureaus. Make sure any accounts in your name are reported to credit bureaus, like rent payments, subscription services, phone and utility bills, and more. 
5. Pay more than the minimum. While making the minimum payment is required, you can give your credit score a boost when you pay more than the minimum, which helps improve your credit utilization ratio.

How to Apply for Student Loans With Bad Credit

Not all student loans have the same application process. How you apply for federal loans is different from how you apply to private student loans.

Federal Student Loans

You’ll apply for federal student loans by completing the Free Application for Federal Student Aid (FAFSA). These applications open every October for the following school year. 

FAFSA is where you’ll apply for many different types of federal financial aid, including scholarships, grants, work-study programs, and student loans. Once you get your federal student aid ID (FSA ID), you’ll complete your FAFSA. Keep in mind that if you’re a dependent student, you’ll need your guardian’s personal and financial documents handy when completing your application. This shows your level of need for financial aid, even for subsidized federal student loans.

After you submit your FAFSA, you’ll receive a Student Aid Report (SAR) with how much you’re expected to receive in financial aid the next year. This includes funding for scholarships, grants, and student loans. If you’re covered for free aid, like scholarships and grants, you don’t have to accept loans. But if you need all the funding you can get, you can accept subsidized and then unsubsidized loans, if necessary. You’ll need to complete a FAFSA every year to continue receiving funding for your education. If you don’t, you’re on the hook for covering any extra costs out of pocket.

Private Student Loans

If you need to apply for private student loans with bad credit, there are a few steps to take first.

1. Check your credit. See what you’re eligible for before lenders do. This lets you see which loans you’d be eligible for based on your creditworthiness. 
2. Complete prequalifications. If possible, see if you’re eligible with certain lenders that offer prequalification. This doesn’t cause a hard credit inquiry and won’t cause your credit score to drop. It can help you narrow down your options.
3. Compare lenders. See which lenders offer you the best loan options based on interest rates, repayment terms, fees, ease of managing your loan and more. You may also want to see which lenders offer other features, like autopay discounts, applying with a co-signer, or 24/7 customer service options.
4. Complete an application. Once you’ve narrowed down your options, complete an application. You should know almost immediately if you’ve been approved.
5. Wait for disbursement. Most private student loan lenders will pay your school directly. If there’s anything else left after your school gets paid, you’ll get excess funds either deposited into your account or a check. Your lender will let you know when repayment starts, which is usually after you leave school.

How to Compare Student Loans For Bad Credit

There’s no universal standard among private student loan lenders. So it’s important to compare all your options before completing an application.

1. Eligibility Requirements

You’ll need to see if you meet the minimum eligibility requirements to borrow a loan. This includes getting at least the minimum amount offered by that lender, credit score requirements and school requirements. 

2. Interest Rates and Fees

Interest rates are what you pay your lender for the sake of borrowing a loan. The lower your interest rate, the less you’ll pay on top of the original amount you borrowed. The same goes for fees. The fewer, the better.

3. Repayment terms

Shorter repayment terms mean you might have larger monthly payments when it comes time to repay your loan. This might be difficult if you aren’t earning a lot after leaving school or are required to start repaying their loan while still going to school. Try to find long repayment terms and if you end up increasing your income a few years after school, you can make larger monthly payments to pay your loan off faster.

Student Loans in the News

From new repayment plans to political controversies, the student loan landscape is often changing. Here are some recent developments in the world of student loans. 

• Biden-Harris administration approves additional relief: In March, the administration announced its approval of $5.8 billion in debt relief for 77,700 borrowers through the Public Service Loan Forgiveness (PSLF) program. To date, the administration has forgiven $143.6 billion for 3.96 million borrowers through PSLF. 
• SAVE plan forgives student debt ahead of schedule: SAVE, the newest student loan forgiveness program, was set to offer loan forgiveness starting in July 2024 for borrowers who originally borrowed $12,000 or less. The Biden administration is offering forgiveness ahead of schedule in the amount of $1.2 billion for nearly 153,000 borrowers enrolled in SAVE. 
• Student loan payments to get cut in half this summer: Still on track for its July 2024 start date is the SAVE plan’s provision to cut payments on undergraduate student loans from 10% to 5% of borrowers’ discretionary income. The payment amount for graduate student loans will remain at 10%. 

Republican-led states suing over the SAVE plan: A group of 11 Republican-led states are challenging the SAVE plan, saying that the Biden administration overstepped its authority in creating this more affordable income-driven repayment plan. Led by Kansas, the states filed a federal lawsuit asking a judge to halt the plan immediately.

Newsweek writer Rebecca Safier contributed to this post.