When applying for any type of loan, the higher an applicant's credit score, the better chances they have at qualifying for low interest rates and other favorable terms. But when it comes to paying for college, many students may have a low or no credit score because they simply haven't been able to build credit yet.
Fortunately, there are still strong financing options for students with poor credit, including both federal and private student loans. Below, CNBC Select rounds up some of the best student loans for bad credit. We focused on factors like eligibility requirements, availability, amounts, interest rates, terms, repayment options, borrower protections and any bonus features. (See our methodology for more information on how we made this list.)
Best for federal student loan
Federal Subsidized/Unsubsidized Student Loan
Cost
1.057% of the loan amount for loans disbursed on or after Oct. 1, 2020
Eligible loans
Direct Subsidized and Unsubsidized loans
Loan types
Fixed rate
Fixed rates (APR)
5.50% for Subsidized and Unsubsidized Undergraduate loans; 7.05% for unsubsidized graduate loans
Loan terms
10–25 years, depending on the repayment plan
Loan amounts
Up to $31,000 for dependent undergraduate and up to $138,500 for graduate or professional students (annual limit depends on your year in school)
Minimum credit score
Not disclosed
Minimum income
N/A
Allow for a co-signer
Not required
Terms apply.
Pros
- Can request deferment or forbearance
- Can choose from multiple repayment plan options
- Low fee charged on the loan disbursement amount
- Available to both undergraduate and graduate or professional students
- Loan forgiveness programs available for eligible borrowers under eligible repayment plans
- U.S. Department of Education pays the interest on direct subsidized loans while you're still school at least half time, during grace period and during times of deferment
Cons
- Borrower is responsible for paying the interest on direct unsubsidized loans at all times, including while they're still in school and during the grace period
- Loan is not serviced by the U.S. Department of Education; borrowers will receive a loan servicer after graduating to manage their payments
Federal Subsidized and Unsubsidized student loans are a great starting point for most students because they don't require a credit check and offer the same fixed, low rates for all borrowers. Federal student loan borrowers can choose from various repayment options and may qualify for certain federal loan forgiveness programs.
Best for no co-signer
Funding U
Eligible borrowers
Qualifying undergraduate borrowers
Loan amounts
Up to $20,000 per school year
Loan terms
10 years
Loan types
Fixed
Borrower protections
Forbearance options available
Co-signer required?
No
Terms apply.
Pros
- Considers borrowers' earning potential
- Borrowers have hardship protections
- No co-signer required
- No fee for paying off loan early
- 0.5% interest rate discount for making interest-only payments in school
- Loan officer assigned to each borrower for hands-on help
Cons
- Only 10-year loan terms
- Only fixed-rate loans
- Not available in every U.S. state
- Non-cosigned loans tend to charge higher interest rates
Funding U is unique in that it doesn't allow students to apply for a loan with a co-signer. Instead, this lender uses other criteria to approve applicants, such as the school's graduation rate, class hours completed, estimated graduation date, academic record, major and employment or internship experience. While this lender doesn't use your credit score to approve or deny you, it may still look at your credit history to make sure there are no instances of missed payments or collections items.
Best for long grace periods
Ascent® Funding
Eligible borrowers
Qualifying undergraduate juniors and seniors, graduate students
Loan amounts
Up to $200,000 for undergraduate and $400,000 for graduate loans
Loan terms
Range from 5 to 15 years
Loan types
Variable and fixed
Borrower protections
Deferment and forbearance options available
Co-signer required?
No
Offer student loan refinancing?
No
Terms apply.
Pros
- Considers borrowers with no credit
- High loan amount
- Variable and fixed rates, so you can choose
- Borrowers have hardship protections
- No co-signer required
- Offers co-signer release
- No origination, application or prepayment fees
- Up to 1% interest rate discount for autopay
- 1% cash back rewards
- Accepts in-school payments
Cons
- Non-cosigned loans tend to charge higher interest rates
- Doesn't offer student loan refinancing
Ascent Funding is another top choice for students applying without a co-signer, but what makes it really stand out is its long grace periods. A six-month grace period is common with federal student loans as well as with some private student loan lenders, but Ascent offers grace periods from nine to 36 months, depending on whether you're an undergrad or graduate student or medical or dental school student. There's also up to a 1% rate discount when signing up for autopay.
Best for applying with a co-signer
College Ave
Eligible borrowers
Undergraduate and graduate students, parents
Loan amounts
$1,000 minimum; maximum up to cost of attendance
Loan terms
Range from 5 to 20 years
Loan types
Variable and fixed
Borrower protections
Deferment, forbearance and grace period options available
Co-signer required?
Only for international students
Offer student loan refinancing?
Yes - click here for details
Terms apply.
Pros
- High loan amount
- Flexible repayment terms
- Variable and fixed rates, so you can choose
- Borrowers have hardship protections
- No co-signer required for U.S. students
- Offers co-signer release
- No origination, application or prepayment fees
- 0.25% interest rate discount for autopay
- Offers student loan refinancing
- Accepts in-school payments
Cons
- Non-cosigned loans tend to charge higher interest rates
- Co-signer release can't be made until half of repayment term has passed
College Ave allows students with limited or no credit history to apply for its student loans with a co-signer. The credit score requirement for co-signers is on the lower end — according to its website, eligible co-signers must have a minimum credit score in the mid-600s. There's also a 0.25% rate discount when signing up for autopay.
Best for flexible payment terms
Earnest
Eligible borrowers
Undergraduate and graduate students, parents, half-time students, international and DACA students
Loan amounts
$1,000 minimum (or up to state); maximum up to cost of attendance
Loan terms
Range from 5 to 15 years
Loan types
Variable and fixed
Borrower protections
9-month grace period
Co-signer required?
No
Offer student loan refinancing?
Yes - click here for details
Terms apply.
Pros
- Applicants with fair credit can qualify
- High loan amount
- Variable and fixed rates, so you can choose
- Borrowers have hardship protections
- No co-signer required
- No origination or prepayment fees
- 0.25% interest rate discount for autopay
- Allows qualified borrowers to skip one payment every 12 months and make it up later
- Offers student loan refinancing
- Accepts in-school payments
Cons
- Non-cosigned loans tend to charge higher interest rates
- No co-signer release option available
- Variable rates not available everywhere
Actual rate and available repayment terms will vary based on your income. Fixed rates range from 5.19% APR to 9.74% APR (excludes 0.25% Auto Pay discount). Variable rates range from 5.99% APR to 9.74% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 9.99% if your loan term is 10 years or less. For loan terms of more than 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account.
Earnest allows applicants with a minimum FICO® Score of 650 to apply and offers a little more flexibility than other lenders when it comes to repayment. There are four repayment plans to choose from: Standard repayment, interest-only repayment, extended-term repayment and a rate reduction program. There are also options for forbearance, deferment and student loan forgiveness and discharge — something private lenders generally don't offer. Plus, get a 0.25% rate discount when signing up for autopay.
More on our top student loans for bad credit
Federal Student Aid
Federal direct loans are available to all college students, regardless of credit score or income, and everyone receives the same fixed rate. All you need to get them is to complete the Free Application for Federal Student Aid (FAFSA). Plus, borrowers can build credit as they pay off their federal student loans.
Students may qualify for subsidized or unsubsidized loans based on financial need. Unlike many private student loan lenders that may require borrowers to pay interest on their loans while still in school, subsidized loans do not accrue interest while in school because the government covers it.
Eligible loans
Direct Subsidized Loans are available to undergraduate students; Unsubsidized Loans are available to undergraduate, graduate and professional students
Loan amounts
Up to $31,000 for dependent undergraduates and up to $138,500 for graduate or professional students; see here for more information on the annual limits for each year that you're in school.
Loan terms
10 to 25 years, depending on the repayment program you choose
Funding U
Funding U offers co-signer-free student loans with fixed interest rates and no prepayment penalties. They are an attractive option for those just starting their financial journey since the lender doesn't rely on credit scores to approve or deny applicants, but loan repayment terms are limited to a span of just 10 years. Funding U offers a 0.5% interest rate discount to students who make interest-only payments while in school, as well as forbearance options.
Note that Funding U's loans are only available to residents in the following states: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia and Wisconsin. (Terms and conditions vary by state. Loan type and loan amount availability may vary by state.)
Eligible loans
Undergraduate loans
Loan amounts
Up to $20,000 per school year
Loan terms
10 years
Ascent
Ascent offers long grace periods for different student loan borrowers depending on the type of degree program you're enrolled in. Undergraduates, for instance, get a nine-month grace period before they're required to make payments after graduating. By comparison, the grace period for Federal student loans is typically just six months.
Ascent has no fees for paying off your loan early, as well as no origination or application fee. It also offers rewards like 1% cash back on principal loan amounts at graduation and there are deferment and forbearance options available to borrowers.
Eligible loans
Undergraduate and graduate loans, health professions and PhD, Master's loans
Loan amounts
$2,001 minimum; maximum up to $200,000 for undergraduate loans; up to $400,000 for graduate loans
Loan terms
5, 7, 10, 12, 15, 20 years
College Ave
College Ave has low credit score requirements for students who are applying with a co-signer. This lender also offers multi-year approval exclusive to undergraduate student borrowers. According to its website, as much as 90% of applicants get approved for multi-year loans, which takes some of the hassle out of applying for funding for subsequent college years.
This lender charges no application, origination or prepayment fee and offers hardship protections like deferment, forbearance and grace period options.
Eligible loans
Undergraduate and graduate loans, graduate health professions and parent loans
Loan amounts
$1,000 minimum; maximum up to cost of attendance
Loan terms
5, 8, 10, 15 years; graduate loans up to 20 years
Earnest
Earnest considers both dependent and independent student applicants and has lending terms specific to each type of student. This lender offers four different repayment options as well as a nine-month grace period for making payments. This lender also allows borrowers to make small $25 monthly payments automatically while they're still in school to help make managing their balance feel more approachable.
This lender charges no origination fees or prepayment penalties and allows borrowers to skip one payment a year without penalties. Plus, Earnest promises to match any competitor's rate and give a $100 Amazon gift card once the rate match is finalized.
Eligible loans
Undergraduate and graduate loans, parent loans, half-time student loans, international and DACA student loans
Loan amounts
$1,000 minimum (or up to state); maximum up to cost of attendance
Loan terms
5, 7, 10, 12, 15 years
Compare offers to find the best student loan
FAQ
What is a private student loan?
Private student loans are a type of funding for college education that comes from private organizations like banks and credit unions. They're used to help college students pay for tuition and other college-related expenses.
Can you consolidate private student loans?
Multiple private student loans can be consolidated into one private loan, but private students cannot be consolidated with federal student loans.
Can you refinance private student loans?
Private student loans can be refinanced to help you secure a lower interest rate on your balance. The terms for refinancing can vary based on the lender.
Can private student loans be forgiven?
Private student loans are not eligible for the same federal student loan forgiveness programs that federal student loans qualify for. It's very unusual for private student loan lenders to offer their version of student loan forgiveness programs.
Bottom line
Before deferring to any sort of loan for funding your college education, make sure you exhaust all student aid options that don't require you to pay back the money — like scholarships, private and state grants and even monetary gifts from loved ones.
If you do need to consider loans, getting a federal loan is a solid option for many students, especially since you qualify for federal forgiveness programs and other measures that may protect borrowers. However, if you've maxed out your borrowing limits, there are student loan options from private lenders that are worth considering as well, even if you have bad or no credit.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every student loan review 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. See our methodology for more information on how we choose the best bad credit student loans.
Our methodology
To determine which student loans are the best for borrowers with bad credit, CNBC Select narrowed down a list of private lenders that directly offer cosigned loans or no credit score requirements. We then compared these student loans based on the following factors:
- What it takes to qualify
- Loan availability by state
- Loan amounts offered
- Loan interest rates (fixed or variable)
- Loan terms in years
- Loan repayment options
- Borrower protections like deferment or forbearance
- Bonus features like autopay rate discounts
Interest rates offered on student loans vary and can change. Non-cosigned student loans often have higher interest rates than student loans with a co-signer. Before taking out student loans through a private lender, first, fill out the FAFSA form to see how much you can borrow in federal aid.
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