Got Bad Credit?You’re not alone. It can take years to get an excellent credit score.
Need a Loan?You can’t wait years for a loan, though. Luckily, there’s a solution.
No Problem.Credit unions often look at other indicators when approving loans.
Let’s say you’re nearing the end of high school, or you’re a year or two into college and you’re in need of a student loan.
If you’re like many college students (or soon-to-be college students) you may be facing a serious problem: bad credit.
This isn’t uncommon. At this point in your life, you likely have very little credit history (if you have any at all). It takes years for the credit bureaus to finally decide you’ve been building credit long enough. Our resident Millennial writer, Maggie, has been building credit for 8 years and only recently has that part of her credit report gone from “average” to “good.”
Without a substantial credit history and without multiple lines of credit keeping your score high, the little mistakes like one missed payment or a credit inquiry can really put a dent in whatever credit you have.
But you need that student loan. And luckily, you can still get one!
The best place to look for student loans for bad credit is a credit union. Credit unions are known for being more lenient than banks when it comes to giving out loans. They often look at other things to determine if they can give you a loan like on-time rent payments, etc.
What’s the catch?
There isn’t one. Credit unions are owned by the members (i.e. you) rather than bankers. That means they’re not-for-profit financial institutions. In short, their goal isn’t to profit off you, but to truly help you. So any money they make goes right back to you in the form of better interest rates and fewer fees. Pretty sweet.
Best Student Loans for Bad Credit
Your Local Credit Union
If you’re wanting to get the best interest rate on your student loan, your best option might be right down the street.
There are plenty of national credit unions, but your local credit union is dedicated to giving back to your own community. The South Florida Educational Federal Credit Union, for example, gives out 15 scholarships a year to graduating seniors as well as a tuition reimbursement scholarship for students going to Miami Dade College.
If you’re attending a university in your own state, you find a local credit union that offers scholarships to the college you plan on attending.
Because these credit unions are so invested in their communities, they’re more likely to look at other indicators of creditworthiness and therefore offer better student loans for bad credit in addition to the scholarships.
Alliant Credit Union
If your local credit unions don’t quite fit your needs, you might start looking at national credit unions to see if they have any student loans for bad credit.
Alliant is one of the biggest credit unions in the country. To join, all you have to do is make a $5 donation to their partner charity. Then you can take advantage of their perks like competitive interest rates and no origination fees.
Alliant, too, looks at a variety of factors when giving out loans. You can even get approved if your credit score is sitting in the high “fair” range (around 640 and above).
Most Credit Unions, tbh
Like we mentioned above, most credit unions are a good bet when you need student loans for bad credit.
Because the benefits don’t stop at getting approved. The lower interest rates may help you have lower monthly payments (or just help you pay it off faster)! And the low or nonexistent fees mean less money is being taken out of your pocket. And believe us when we say, those ATM fees can really add up over time. And when it comes to student loans, every little bit of savings helps.
Beyond that, because credit unions are so invested in their members, they often provide financial guidance, resources and workshops to help you along the way.