How to Get Student Loans with No Credit History

Many students face the problem of how to get student loans with no credit history because of their age. The typical age to seek student loans is 17 or 18, a time before most people will even have an income let alone a significant credit history. The good news is: student loan lenders understand this necessary challenge. They are willing to work with most students to provide a loan regardless of the lack of credit history so long as the correct circumstances are present.

#1 Determine the Cost of School

You will need to know how much money you need before you start shopping for a loan. If you have already chosen a college or university, then ask the office of financial aid how much the average student needs per semester or per year. It is important to note most loans are given each year even though college is typically 2-4 years long.

#2 Consider Federal Loans

Need-based loans are available through the federal government at a much lower financing cost than private loans. Because these loans are need based, they may have lower credit requirements. It is still key that you prove you are credit worthy, meaning you should not have too much debt or any defaults on previous loans. However, if you have just an average credit score because of your short credit history, you should be able to secure a federal loan at a low rate if you are determined to be in need.

#3 Prepare Credit Applications

Your applications should be prepared with as much detail as those you sent to the colleges you applied to. You will need to provide all information accurately; you should remember you are being judged on all points of your application, including how professionally it is prepared. Submit supplemental documents where necessary, such as references from your school of choice.

#4 Use a Cosigner

Some students will want to steer away from cosigners because the loan will not help build their credit as much. Basically, when you pay off a loan with a co-signer, you will not see as significant a jump in credit as if you took the loan by yourself. Despite this drawback, a cosigner lends you the necessary credit for the loan, allowing you to secure a loan despite your short credit history. It may be the best option to keep your interest low and your limits high if your credit does not stand on its own.

#5 Opt for a Work-Study Program

Your college will have an office of financial aid. Aside from providing information on potential grants, this office can advise you on ways to make money while you work. If you are working while at school, you can pay loans off as you go, requiring no grace period on the loan. A loan without a grace period is easier to secure because of the lower risk to the lender. If you can may payments immediately on a loan, your lack of credit history will not be as great a factor.

 


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