Paying for school is expensive. While government financial aid can help, it sometimes isn’t enough to cover all your living expenses. To get through your degree, you may need to apply for another loan.
If you decide to apply for a loan, you need to plan ahead of time because it can be difficult for a student to get a bad credit loan.
Why is it difficult?
When you apply for any private loan, the lender is going to consider your credit score to make a decision. This score reflects how safe you are as a borrower and is based on how you handled debts in the past.
Since most students haven’t have a chance to build up a credit score, they typically have very poor credit scores or no credit history at all.
To make it worse, lenders also will consider your total income. Since you’re a student, you’ll have little to no income, which makes it even harder to qualify.
As a result, when you apply for a loan, the chances are high you’ll get rejected.
“As a student, your most realistic chance
of getting a loan is with a cosigner.”
Apply for as little as possible.
To help your chances of getting a loan, you should apply for as little money as you can your first time around. Lenders are more willing to take a chance on a student for a little bit of money than for a big loan.
They would lose less if the student doesn’t pay a small loan back. If you can even get approved for a small amount, it gives you a foot in the door for credit.
By paying back this loan, you’ll build up credit score. This will make it easier to qualify for more money later on in your degree.
Ask for help from a cosigner.
As a student, your most realistic chance of getting a loan is with the help of a cosigner. A cosigner is another person that backs up your loan and is also responsible for paying the money back.
To help your application, your cosigner should have an established credit history and steady income. Your best bet is probably your parents, but another family member or close friend could also work.
Unfortunately, it is a bit difficult for students to get credit loans. However, this advice should help your chances and it’ll only get easier to get loans going forward.
Photo source: eurocampus.com.