Despite your bad credit history, you can obtain a bad credit student loan from either a federal or a private institution. These days, young people are obtaining credit earlier and earlier and there a lot of older people who are going back to school to start or finish a degree program or to get an advanced degree. There are many bad credit stories out there because the people taking out the loans are not used to lending practices and have not received any education in the handling of money. It is commonplace to become overextended and fall behind on bill payments because of cases of emergency, illness, loss of employment and other factors out of the student's control. Unfortunately, these legitimate factors are of no interest to the reporting agencies who track your credit and credit history. As a result your credit rating is affected negatively. Since one of the reasons for getting an education is to increase your lifetime earnings potential, you do not want to have a large black mark on your record early in the game.
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The reputable institutions that are used to and welcome bad credit loans are glad to have applicants who have experienced these kinds of difficulties. The kicker is that you will be penalized for the bad credit history with higher than best rates. Since the loan is a higher risk for the lending institution, they offset the risk by increasing the interest rate. There is no good crying over spilt milk so the best thing is to find the right lenders and negotiate the best deal that you can under the circumstances.
Just be sure that you stay on top of your finances from here on and make all your required payments on time. You will need your college education in life and there will come a time when you will be able to pay off the loan and straighten out your credit history. Following graduation, you may have the option of refinancing with a lower rate than the original loan. As you progress financially, you can opt to pay more per month to reduce the principal on the loan and pay it down more quickly.
One other possibility that you may want to explore is to ask your parent of a friend with good credit to co sign the loan. A co signer with excellent credit will reduce the interest rate the lending institution would otherwise charge on a bad credit student loan. There are Federal loan programs that will allow a student with bad credit to go to school and not have to begin repayment until the borrower graduates. Almost all student loans will have require certain requirements regarding study. The most important one for students requiring deferred repayment is that you need to be a full time student in most cases.
One tip for you if you obtain a bad credit student loan is to keep on working to improve your credit history while you are in school. Working part time jobs, repaying loans early, staying on time with all loan repayment requirements are all factors that will help you in subsequent loan negotiations with lenders and will certainly result later in life with loans with lower rates and less cost. When you get the loan, don't just forget about improving the situation for the future. You'll be glad you took care of this while you were in school.
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