Moe’s B2B World

If you have bad credit and you need money to go to college, there are some steps you can take to get the funding you need.

The Free Application for Federal Student Aid is the first thing you need to fill out. This is more commonly called the “FAFSA”. While the application itself is long and seemingly complicated, it is not as bad as you might think and it will be worth all of your efforts.

When you submit a FAFSA, you are applying for the Federal Stafford Loan. This loan is given to those who have a small income and it has a low interest rate. No credit check is involved with getting it. In order to receive it you have to be able to prove citizenship and financial need and you can’t have a former Stafford Loan in default.

When you fill out the FAFSA, it is a good idea to apply for a Perkins Loan as well. Do this as soon as you can because these loans are not endless and you don’t want to miss out on getting one. A Perkins Loan also does not require a credit check and is based on need. They come from school and government funds.

The money you receive from filling out the FAFSA and obtaining a Perkins Loan may not cover everything you need and with bad credit, getting a private student loan will be difficult if not impossible unless you have a cosigner.

The person you ask to cosign for your loan must have good credit. Because your credit is not good enough to get a loan, the loan you get will be based on the cosigners credit score. Don’t bother using a cosigner whose credit is marginal or worse.

When someone cosigns for a loan, they agree to pay if you default on your loan. So if you do choose to go this route, you should know that you have a responsibility to not only the loan institution, but to your cosigner as well to make your payments on time and in full every single month. Don’t ask someone to cosign if you plan on leaving them to foot the bill. A cosigner essentially says they trust you to keep your obligations. By allowing you to use their credit score, they are putting their trust in you.