Best student loans for bad credit or no credit: November 2022

Written by
Holly D. Johnson
Edited by
Chelsea Wing
Reviewed by
Mark Kantrowtiz
As of November 26, 2022
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Bankrate's ranking of student loan lenders for bad credit evaluates interest rates, fees, term lengths and features to help you compare companies side by side. The resources below can also guide you through the process of applying for a loan with bad credit or evaluating alternative funding options.

If you're looking for a student loan with bad credit, it's best to start with federal loans, since most don't require a credit check and all come with low rates and robust borrower protections. However, you can also pursue private student loans, which offer larger loan amounts and more customizable repayment. It may also make sense to look into options like income share agreements, which don't have strict credit score requirements.

The current federal student loan interest rate for the 2022-23 school year is 4.99 percent for undergraduates and either 6.54 percent or 7.54 percent for graduates. Private student loan rates currently range from around 2 percent to around 15 percent — but borrowers with poor credit should expect to receive rates near the top of that band.

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INCOME BASED REPAYMENT

4.6

Bankrate Score
Fixed APR From

4.50- 14.83%

with AutoPay
Loan Amount

Cost of attendance minus aid

Term: 10-15 yr
Min. Credit

639

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Income Based Repayment - No Cosigner Required

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4.5

Bankrate Score
Fixed APR From

4.62- 16.75%

Loan Amount

$2k- $200k

Term: 5-20 yr
Min. Credit

Not disclosed

The Bankrate guide to choosing the right student loan with bad or no credit

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At Bankrate, our mission is to empower you to make smarter financial decisions. We’ve been comparing and surveying financial institutions for more than 40 years to help you find the right products for your situation. Our award-winning editorial team follows strict guidelines to ensure the content is not influenced by advertisers. Additionally, our content is thoroughly reported and vigorously edited to ensure accuracy.

When shopping for student loans you can use to pay for school, look for a competitive interest rate, repayment terms that meet your needs and minimal fees. Loan details presented here are current as of Oct. 20, 2022. Check the lenders’ websites for more current information. The top lenders listed below are selected based on factors such as student loan interest rates, loan amounts, fees, credit requirements and broad availability. To learn more about how we selected lenders, see our methodology section at the bottom of the page.

Compare bad- or no-credit student loan rates in November 2022
LENDER CURRENT APR RANGE LOAN TERMS MIN. LOAN AMOUNT MAX. LOAN AMOUNT BEST FOR
Federal student loans 4.99% - 7.54% fixed 10 to 25 years None $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduate students Overall student loans
Ascent 4.14% - 14.40% variable (with autopay); 4.62% - 16.75% fixed (with autopay) 5 to 15 years $2,001 $200,000 Academic achievers
Funding U 7.49% - 12.99% fixed (with autopay) 10 years $3,001 $20,000 Undergraduate borrowers

Best overall

Federal Student Loans

Federal Student Loans

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Check rate with Bankrate

Min. credit score:
None
Fixed APR From:
3.73% –6.28%
Loan amount:
$1,000– $500,000
Term lengths:
10 to 10 years
Min. annual income:
$0
Overview: Most federal student loans don’t require a credit check, so these loans are easily the best option for students with poor credit or no credit history. Federal student loans also come with competitive interest rates, and you may choose from several repayment options. Graduate students may borrow up to their full cost of attendance in grad PLUS loans, while Direct Subsidized and Unsubsidized Loans have borrowing caps for graduate and undergraduate students.

Why federal student loans are best overall: Federal student loans are available to every borrower, regardless of creditworthiness or financial health. Plus, each type of federal loan offers the same interest rate to all borrowers, so you'll know your rate before applying.

Best for Academic Achievers

Ascent
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Check rate with Bankrate

Min. credit score:
Not disclosed
Fixed APR From:
4.62% –16.75%
Loan amount:
$2,001– $200,000
Term lengths:
5 to 20 years
Min. annual income:
$0
Overview: Among Ascent's student loan options is a unique non-co-signed student loan for college juniors and seniors. Your school, program, academic performance and other factors factor into your eligibility. Ascent claims that these loans are based on your future income, so you may be able to qualify if you're in a high-earning field of study. Borrowers can also apply for undergraduate and graduate loans with a co-signer, which opens up lower rates.

Why Ascent is best for borrowers without a co-signer: Ascent is one of only a few lenders with a loan option that approves borrowers based on factors other than credit score, so you may not need a co-signer.

Best for Undergraduate Borrowers

Funding U
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Check rate with Bankrate

Min. credit score:
Not disclosed
Fixed APR From:
Not disclosed
Loan amount:
$2,001– $200,000
Term lengths:
0 to 0 years
Min. annual income:
$0
Overview: Funding U does not use credit scores to make lending decisions. Instead, it considers borrowers' academic achievements, career path and GPA. This makes it a great option for borrowers who lack a credit history and a co-signer. While Funding U does limit loan amounts to $20,000 a year, it's worth considering for undergraduates who need extra funds after using up their federal loan allotment.

Why Funding U is best for undergraduate borrowers: Funding U lends only to undergraduate students, and it's one of the only lenders that accepts undergraduates without a co-signer. Even first-year students are eligible to apply; in this case, lending decisions will be made on high school academics.

Student loan alternatives for borrowers with bad credit

For some borrowers, the high interest rates and strict approval guidelines associated with bad-credit student loans may not be worth it. In this case, borrowers may turn to income share agreements.

Income share agreements give you money for school, then accept a percentage of your monthly income as payment. When you sign up for an income share agreement, you'll receive terms including: 

  • The percentage of your income you'll owe.

  • The minimum and maximum amount you'll be required to pay monthly.

  • The length of time for which you'll need to make payments.

Income share agreements can benefit borrowers with bad credit since many lack student loans' strict credit score requirements, and you won't be subject to high interest rates. 

But remember that your income share agreement payments will change alongside your income. If you end up in a high-paying job, you may pay back more than what you borrowed through your ISA. Still, the risk could be worth it if you're having trouble getting approved for other types of funding.

Edly: Best income share agreement for quick funding

Overview: Edly offers income share agreements of up to $25,000, with payments starting four months after graduation or once you earn more than $30,000. Borrowers can benefit from a quick application and approval, as well as perks like deferred payments after a job loss. Edly's website does not specify a payment period. Borrowers can choose to pay off the loan early.

Why Edly is the best income share agreement for quick funding: Edly advertises the fact that it has a quick application and approval process. According to the company, borrowers can check their terms within 30 seconds and complete the application within two minutes.

Pros:
  • Three-minute application.
  • Payments deferred upon job loss.
  • No minimum credit score.
Cons:
  • Does not disclose payment structure.
  • Relatively low loan maximum of $25,000.
  • Few direct customer service options.

Eligibility & More: Edly doesn't disclose many of its eligibility requirements; it says only that it will check your school and major. While there are no minimum credit score requirements, Edly will also check for any adverse credit history. Borrowers with late payments or collections in their credit history may have a harder time being approved.

Stride Funding: Best income share agreement for career resources

Overview: Stride Funding's income share agreements have transparent eligibility requirements and a plethora of online resources. Borrowers make up to 60 payments unless they reach the defined payment cap.

Why Stride is the best income share agreement for career resources: In addition to the basic perks of an income share agreement, Stride goes a step further by providing career resources and perks to its members, even after graduation. These include networking events, skill workshops and exclusive discounts.

Pros:
  • Robust online resources.
  • Clear eligibility criteria.
  • Maximum repayment period of 10 years.
Cons:
  • Does not disclose income share percentage.
  • Relatively short grace period of three months after graduation.
  • Funding limited to $25,000 per year.

Eligibility & More: Stride evaluates your future ability to repay the loan. It does not have a minimum credit score but may not approve borrowers with an adverse credit history, such as a history of default or collections. Borrowers must be U.S. citizens or permanent residents attending a Title IV college or university at least half time. They must be within two years of graduation. Associate degrees are not eligible. Stride also requires a GPA of at least 2.9.

Stride income share agreements are available to borrowers in all states except Alabama, Colorado, Iowa, South Carolina and Washington.

Can you get a student loan with bad credit?

It is possible to get a student loan even if you have bad credit or no credit history. That said, it will be more difficult to qualify, and rates will be higher. Federal student loans are the easiest to qualify for. Most won't do a credit check and don't consider your credit score. Plus, interest rates are the same for all borrowers. 

If you need to borrow private loans, you can look for lenders that have low credit score requirements, take other eligibility requirements into account or let you add a co-signer to your loan.

Federal vs. private student loans

Borrowers with poor credit can choose between federal and private student loans. The U.S. Department of Education offers federal student loans and sets one fixed rate for all borrowers. They also don't have a minimum credit score requirement, so they're the first place to turn if you have a spotty credit history.

Note that through Dec. 31, 2022, borrowers with federal student loans are not required to make payments and interest charges are waived. On Jan. 1, 2023, interest accrual will resume and so will borrowers' responsibility for making payments.

Banks, credit unions and online lenders offer private student loans. Unlike some federal student loans, they often allow you to borrow up to the total cost of attendance at your school. However, you won't have the benefit of income-driven repayment plans or loan forgiveness programs. Private student loans offer a wider range of interest rates based on your credit score.

Here are some of the key differences between federal and private student loans:

PRIVATE STUDENT LOANS FEDERAL STUDENT LOANS
Maximum loan amount Depends on lender (may be up to 100% total cost of attendance) $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduates
Interest rates 2% to 15%; may be fixed or variable 4.99% to 7.54% fixed for 2022-23
Fees Varies by lender; often no fees Origination fee of 1.057% to 4.228%
Benefits High loan limits, low interest rates, the choice between fixed and variable rates Access to income-driven repayment plans, long deferments and forbearances, no credit check required for most loans
Drawbacks High rates for bad credit, limited forbearance options, no federal benefits Lower loan limits, limited repayment terms
Qualification requirements Depends on lender; often requires good credit or a creditworthy co-signer basic eligibility criteria

What to know about the FAFSA

Borrowers who are interested in taking out federal student loans must fill out the FAFSA every year. This form asks for information about your finances and your family's finances, but completing it won't affect your credit.

For each FAFSA cycle, the application opens on Oct. 1 prior to the award year and closes on June 30 of the award year. For 2023-24, the FAFSA opens on Oct. 1, 2022, and closes on June 30, 2024. However, deadlines vary by state and college. In some circumstances, you can make corrections after submitting the application.

Only U.S. citizens and eligible noncitizens may receive federal student loans through the FAFSA. DACA students may submit the application, but their aid is limited to state and institutional scholarships and grants.

Applying for a student loan with a co-signer

A co-signer is a creditworthy friend or family member who takes on the responsibility of the loan with the borrower. Their creditworthiness can make it easier for the primary borrower to get approved for the loan and qualify for lower interest rates. 

The downside is that the co-signer is responsible for paying the loan if the primary borrower misses payments. Delinquency could affect the co-signer's credit score.

Many lenders have the option for co-signer release, which allows the borrower to release the co-signer from their obligation after a certain number of on-time payments.

Can I get a student loan without a co-signer if I have bad or no credit?

If you don't have a co-signer, your best bet at finding funding is federal student loans. Most don't require a credit check. The one exception is Direct PLUS Loans, which look for an adverse credit history but don't set a minimum credit score.

With private student loans, whether or not you can get approved without a co-signer depends on the lender. Some have more flexible eligibility requirements, while others offer loans designed for borrowers without co-signers. These unique loans may use your academic performance or future earning potential to determine your eligibility and rates.

How to improve your credit score for a student loan

If you don’t have a co-signer or you have some time before you need to apply for a student loan, it’s worth figuring out some ways to increase your credit score:

  • Pay all of your bills early or on time. Your payment history is the most important factor in determining your FICO Score. Late payments are detrimental to your credit health, but making on-time or early payments on all of your bills can boost your credit score over time.
  • Pay down other types of debt. The more debt you pay off, the lower your credit utilization, which makes up 30 percent of your FICO Score. If you have several types of debt, focus on high-interest debt and unsecured debt like credit cards first.
  • Get a new credit account. If you don’t have any credit history, sign up for a starter credit card. If you use your credit card to make small purchases and pay it off each month, you’ll build positive credit habits and your credit history at the same time.
  • Pay off accounts in default or collections. Consider paying off any late accounts prior to applying for a student loan. Collections accounts stay on your credit report for seven years, which could drastically reduce your chances of being approved for financing.
  • Dispute credit report errors. Mistakes can happen, which is why it's smart to regularly check your credit reports and dispute any errors that could be negatively affecting your credit score. You can check your credit reports for free at AnnualCreditReport.com.

Student loan options for parents with bad credit

Parents with poor credit still have options to help finance their child's undergraduate or graduate degree. Parents should start with a federal parent PLUS loan, which comes with some federal benefits and can cover up to the total cost of a child's education. 

Eligibility requirements for a parent PLUS loan are less stringent than those of private student loans, so parents with bad credit can still get approved. However, adverse credit history like defaults, foreclosure or bankruptcy will make it harder to qualify. Parents with adverse credit history may add an endorser to the loan, who essentially serves as a co-signer.

Parents can also look into private student loans. Many lenders have student loans designed for parents. These loans may cover up to the full cost of a child's education and feature flexible repayment options. 

However, most private lenders have a minimum credit score requirement. If you go this route, look for lenders that accept borrowers with poor credit or take other factors into account. Parents can also apply for a loan with a creditworthy co-signer if they have bad credit or if their initial application is denied.

FAQ about bad- or no-credit student loans

Methodology

The best student loans for bad credit or no credit are accessible to many borrowers and feature reasonable interest rates. To select lenders, we first sought out lenders that are available across the United States and which feature a range of loan amounts and repayment options.

To narrow down the field, we then examined lender fees, APR ranges and eligibility requirements to see which lenders kept costs as low as possible for bad-credit borrowers. Lenders were then ranked based on unique features that appeal to a specific group of borrowers — for instance, borrowers applying for a loan without a co-signer or those seeking flexible repayment terms.

We also looked into income share agreements, which can be a better option than student loans for borrowers who have no credit and no co-signer. The income share agreements featured on this page have flexibile eligibility requirements and low rates.