Best Student Loans For Bad Credit Or No Credit Of April 2024

Among undergraduate and graduate student loan options, federal direct subsidized loans are the cheapest and most flexible. Only undergraduate borrowers with financial need—as determined by the information in the Free Application for Federal Student Aid, or FAFSA—can get subsidized loans. The government will pay the interest when students are in school, during their grace period and when they put their loans into deferment.

The interest rate on subsidized loans is one of the lowest you’ll find, and no co-signer is required. All eligible undergraduate borrowers qualify and they receive the same rate regardless of credit history. Most importantly, borrowers of federal subsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.

While there is an origination fee of 1.057%, it’s lower than what many private lenders offering loans without a co-signer charge.

Loan terms: 5, 7, 10, 15 and 20 years

Loan amounts available: $5,000 minimum; no maximum, except for associate’s degree graduates, who can refinance up to $50,000.

Eligibility:   Must be enrolled at least half-time in a school that participates in the federal direct loan program. Must be an undergraduate and be determined to have financial need.

Forbearance options:  Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.

Federal direct unsubsidized loans offer low fixed interest rates, and this type of loan isn’t credit-based and doesn’t require a co-signer. All eligible undergraduate borrowers qualify, and they receive the same rate regardless of credit history.

While there’s a chance the most creditworthy borrowers could get a lower interest rate with a private student loan, they’ll miss out on a range of consumer protections that might be useful in the future. Borrowers of federal direct unsubsidized loans have access to income-driven repayment options that can lower the amount due and loan forgiveness for those who work in public service fields.

Direct unsubsidized loans come with an origination fee of 1.057%, while most private loans do not. But in many cases, the low interest rate and loan benefits make the fee worth it.

Loan terms: Terms of 10 to 25 years are available, depending on the repayment plan.

Loan amounts: Loan amounts up to $12,500 per year and $57,500 in aggregate in aggregate are available.

Eligibility: You must be enrolled at least half-time in a school that participates in the federal direct loan program.

Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.

Co-signer release policy: N/A

The Future Income-Based Loan is one of two student loans Ascent offers to undergraduates that don’t require a co-signer. It’s aimed at borrowers without any credit history or who don’t meet the income requirements for Ascent’s other loan that doesn’t require a co-signer, the Non-Co-Signed Credit-Based Loan. Your eligibility and interest rate are based on your school, educational program, time to graduation, GPA and other factors.

It’s only available to college juniors and seniors, though, and you must have a GPA of 2.9 or higher. Like other Ascent loans, it comes with no origination fee, a generous 24 months of forbearance and a graduated repayment option that allows payments to start out low then gradually increase, keeping the original loan term the same length. If you’re an international student, you must apply for an Ascent loan with a U.S. citizen co-signer, meaning you don’t qualify for a non-co-signed loan.

Loan terms: 5, 7, 10, 12, 15 or 20 years

Loan amounts available: $2,001** to $20,000 per year, up to $200,000 in aggregate for all Ascent loans.

Eligibility: Must be a college junior or senior with a GPA of 2.9 or higher enrolled at least half-time. No minimum credit or income requirement.

*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; and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts&Cs. Rates are effective as of 4/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require interest-only 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 repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.

**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.

Similar to Ascent’s Future Income-Based Loan, borrowers qualify for A.M. Money loans based on their educational background and GPA, not their credit. The company does not allow co-signers. A.M. Money also stands out for the fact that it offers an income-based repayment plan for up to 36 months for borrowers who need it. The minimum monthly payment on the plan is $50.

A.M. Money charges a 4.5% origination fee.

Loan terms: 10 years

Loan amounts available: $2,001 to total cost of attendance, up to a $50,000 cap.

Eligibility: The loan is merit-based, so it has no credit or income requirements. Students must attend one of several eligible schools, mostly located in the Midwest. But A.M. Money encourages prospective borrowers to apply even if their school isn’t yet listed.

Forbearance options: Up to 12 months of forbearance available. Borrowers can make income-based payments for up to 36 months.

Co-signer release policy: No co-signer required

Funding U doesn’t make loans based on credit history and doesn’t require student borrowers to use a co-signer. Borrowers qualify for a loan based on year in school, academic and work background, current courses, graduation prospects and likely future earnings. But it doesn’t lend in every state, and the company says its lowest rates are reserved only for college seniors with the highest academic performance.

Also, while Funding U’s loan limits are comparatively low, private loans should be used sparingly, so ideally borrowers won’t need them to finance larger gaps in funding.

Loan terms: 10 years

Loan amounts available: $3,000 to $10,000 per year ($50,000 per student aggregate).

Eligibility: Students must meet GPA requirements and attend colleges that meet certain six-year graduation rate thresholds, depending on the student’s year in school. To qualify, first-year students must have a minimum high school GPA of 3.5, second-year students must have a minimum college GPA of 3.0, juniors must have a minimum GPA of 2.75 and seniors must have a minimum GPA of 2.5.

Note that only borrowers in these states can apply: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia and Wisconsin.

Forbearance options: Up to 24 months of forbearance allowed in 90-day increments. Borrowers must pay $30 per month while in forbearance, which is less generous than payment-free forbearance that other lenders offer. But this policy helps borrowers avoid occurring large amounts of interest.

Co-signer release policy: No co-signer required

Many international students don’t qualify for federal student loans, and they typically need a U.S. citizen co-signer in order to get approved for a private student loan. Prodigy Finance is a London-based company that offers private student loans to international master’s students without requiring a co-signer.

You must attend an eligible school in one of the 18 countries Prodigy Finance lends in. All interest rates are variable, meaning they can change with market conditions, and borrowers receive rate offers based on their course of study and future earning potential. The average rate, according to Prodigy Finance, is 7.3%. The loan comes with an additional 4% administration fee spread over your monthly payments.

Prodigy Finance doesn’t lend to U.S.-based borrowers living in these states: Alabama, Arkansas, Connecticut, Delaware, Hawaii, Idaho, Indiana, Iowa, Maine, Michigan, Mississippi, Minnesota, Montana, Nevada, New York, North Dakota, Ohio, Rhode Island, South Dakota, Vermont, Washington, West Virginia or Wyoming.

Loan terms: 7 to 20 years

Loan amounts available: $15,000 minimum; maximum amount based on individual application.

Eligibility: Must be a resident of an eligible state and country attending an eligible school either part-time or full-time

Forbearance options: Available for nine months. Borrowers with financial hardships may apply for an interest-free payment arrangement; those facing low incomes, medical emergencies, unexpected family responsibilities or unemployment can apply for $0 or reduced payments.

Co-signer release policy: N/A