The best student loans for bad credit of September 2026

Federal borrowing limits for college have been reduced, forcing more borrowers to turn to private student loans to bridge the financing gap. But most college students have a thin or nonexistent credit file.

CNBC Select has chosen the best private student loans for applicants with bad or no credit, focusing on rates, eligibility requirements, terms, repayment options and other criteria. For more on how we made this list, see our methodology.

Who's this for? Earnest offers standard, interest-only and extended-term repayment plans, as well as a rate reduction program if you're experiencing financial hardship. Borrowers enjoy a nine-month grace period after graduation, three months longer than the industry average.

Standout benefits: Applicants with a FICO® Score of 650 or better can apply without a co-signer. Earnest will match qualified competitors' rates and give a $100 Amazon gift card when the rate match is finalized.

Who's this for? Funding U uses criteria besides credit to approve applicants — including GPA, estimated graduation rate and employment experience — making it easier to be approved without a co-signer.

Standout benefits: Students who make interest-only payments while still enrolled are eligible for a 0.5% interest rate discount. Funding U will also send borrowers a $100 Amazon gift card upon graduation.

Who's this for? College Ave approves co-signers with credit scores in the mid-600s, lower than many competitors require. Student loan borrowers can apply for cosigner release once half of the original repayment term has elapsed.

Standout benefits: Repayment options range from full principal and interest payments while enrolled to deferred until graduation. College Ave also offers multi-year approval to undergraduate student borrowers.

Who's this for? Most lenders offer a six-month grace period, but Ascent^® Funding* extends that pause to up to 36 months after graduation, depending on the program.

Standout benefits: Borrowers receive 1% cash back* on their principal loan amounts at graduation. If you're enrolled in an Outcomes-Based Loan® program, you can enjoy a rate reduction of up to 1.0% for setting up autopay*. For credit-based loans, the discount is 0.5%.

While most student loan lenders prefer a credit score in the mid-600s, considered fair to good, it is possible to be approved with bad credit — or even no credit score at all. In most cases, you'll need a co-signer with good credit. Not all lenders allow for co-signers and some restrict how long they must remain on the loan, so be sure to check before you apply.

DACA (Deferred Action for Childhood Arrivals) students and non-U.S. citizens can also apply for a private student loan, as long as they get a co-signer who is a U.S. citizen and meets other eligibility requirements.

Lenders like Ascent Funding and Funding U specialize in students with weak or no credit and may approve borrowers without a co-signer. The tradeoff, however, is usually higher interest rates and less flexible repayment terms.

To compare loan offers, consider the following:

• Annual percentage rate (APR): The APR is the total yearly cost of the loan, expressed as a percentage. Because it includes both your interest rate and mandatory fees, it gives you a much clearer picture of what the loan actually costs than just the base interest rate. All else being equal, you want the loan with the lowest APR.
• Repayment terms: Longer repayment terms can mean smaller monthly payments, which may suit your budget better. But you'll pay more in interest over the life of the loan. Typically, you want the shortest loan term you can reasonably afford.
• Fees: Look for lenders with no origination fees, late fees or prepayment penalties.
• Co-signer release term: If you have a co-signer, they'll have to repay the loan if you default. Lenders will allow you to release your co-signer after a set period (or a specific number of payments). The quicker your co-signer can be released, the better.
• Deferment/forbearance: While less common, some private lenders have options to pause payments during financial hardship or in-school periods.

Private student loans are credit-based, but having bad credit isn't an automatic dealbreaker, especially if you have a creditworthy co-signer. Here's how the process works.

Step 1. Exhaust federal aid first. Private loans should only be a consideration if you've maxed out federal student loans, which offer lower rates and more protections. Most importantly, there's no credit check involved.

Step 2. Know your credit score before you apply. Get your free credit report from your credit card provider or AnnualCreditReport.com, so you know what to expect. Look for duplicate accounts, outdated information and other errors. Even small errors can lower your score, so dispute anything inaccurate.

Step 3. Find a creditworthy co-signer. Depending on your score, income and employment history, you are likely to need a co-signer to not only get approved for a student loan, but get a preferable interest rate. Make sure they understand they're equally responsible if you don't make payments.

Step 4. Shop for lenders that work with bad credit. Credit unions, community banks, fintech lenders and other nontraditional sources are more likely to have flexibility when it comes to credit requirements. They will often consider your educational performance, earning potential or larger financial picture.

Step 5. Get prequalified and compare. Prequalification lets you compare rates from multiple lenders with a soft credit pull that won't damage your credit score further. Don't just fixate on the interest rate, look for:

• Repayment terms: A longer term means lower monthly payments, but more interest over time.
• Fees: Most lenders have dropped origination fees and other upfront charges, but you might still be hit with a disbursement fee.
• Deferment and forbearance options: Private loans don't come with nearly as many safeguards as federal loans, but lenders may offer hardship protections.
• Co-signer release: If you are getting a co-signer, see how many payments are required before they can be released from their obligation.

Step 6. Decide on the lender you want. Each formal application triggers a hard inquiry, which can temporarily lower your credit score. If you need to submit multiple applications, try to keep them all to a limited 30-day window. (Credit-scoring models treat multiple inquiries in this timeframe as a single event.)

Step 7. Prepare your documentation and apply. Student loan lenders typically want to see:

• Name, address and date of birth
• Social Security number
• Income and employment information (or your co-signer's)
• Proof of enrollment or acceptance
• School cost of attendance details

Step 8: Review and accept your loan offer. If you're approved, your lender should reach out with your rate, term and monthly payment amount. Borrowers have three business days after signing to cancel, but you should still read the terms carefully first.

Step 9: School certification. Your lender will certify the loan with your school's financial aid office to ensure it aligns with the actual cost of attendance. Because some schools only certify loans once a weeks or even biweekly, this phase can take anywhere from a few days to several weeks.

Once the loan is certified and the cancellation period ends, your student loan is ready to be disbursed.

Step 10: Disbursement. Private student loans are typically sent directly to your school to cover tuition and fees. (The funds may be split into two disbursements, usually one per semester.) Any leftover funds will be sent to you, either to be returned to the lender or to cover other school expenses.

Step 11: Repayment starts. When you start repaying your private student loan depends on the option you chose when you applied.. If you selected a repayment plan with in-school payments, you'll make your first payment as soon as your funds are disbursed. If you chose deferred repayment, there's usuall a six month grace period after you graduate or drop below half-time enrollment.

These should be your first moves when trying to raise your credit score:

Pay bills on time. Payment history represents 35% of your credit score, so making on-time full payments is the most important way to improve your score. Enrolling in autopay can help.

Limit your credit utilization. Your credit utilization rate is the proportion of your total credit limit that you're currently using. If your credit cards have a total limit of $20,000 and your balances total $5,000, your credit utilization rate is 25%. Experts recommend keeping it below 30%, though people with excellent credit tend to have rates of 10% or less.

Avoid opening new accounts. Lenders use a hard inquiry when you apply for a line of credit, which results in a temporary hit to your credit score. If you're trying to raise your score, avoid applying for multiple credit cards or installment loans in a short period.

Check your credit report for errors. Your score may have been impacted by identity theft or inaccurate items on your credit report. Even if your situation was caused by your actions, mistakes could be dragging your score down further.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every student loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of student loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

To determine the best student loans for borrowers with bad credit, CNBC Select reviewed more than 20 private lenders that don't require a credit score or that allow creditworthy co-signers.

To narrow our list, we focused on:

• Eligibility requirements
• Maximum and minimum loan amounts
• Interest rates (fixed or variable)
• Loan terms
• Repayment options
• Customer service and digital experience
• Borrower protections, including grace periods, deferment and forbearance
• Bonus features, like autopay discounts

We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.  

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.

*Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent's Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 7/15/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval; restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower's credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) 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 examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.