There are many options for students who are in desperate need of a student loan but have bad credit. Getting student loans without a cosigner may pose as a challenge at first, but all it takes is a little investigation and patience for finding the right lender.
One of the ways to get a student loan without a cosigner is to provide some form of collateral. This may be hard to do for some college students who are young and may not have a lot of collateral to give. One method is to get a secured personal loan which can be used for student expenses. Personal secured loans are usually offered by banks which are insured by the FDIC. Credit unions also offer great deals on secured loans. How exactly do these loans work?
Students are required to first get their credit report checked. Once it is determined that their credit is bad, the borrower will be asked to deposit cash into a savings account. This money is to be used as collateral. Once the money is deposited, the borrower will be granted a line of credit. So for example; if the borrower puts down $500, they can receive $1000-$5000 in credit. The money in the account will not be touched and will be returned to the borrower once the loan is repaid. Secured personal loans are a great option because they usually are offered with low interest rates. They are also good for cleaning up credit since most of the lenders report to the credit union.
Some lenders will allow a student borrower to get student loans who have bad credit and no cosigner if they have a valid checkings account that is in good standing. The lender will also require the borrower to have proof of residency and employment. Since many people are becoming self employed, many lenders will accept multiple forms of employment-proof such as paystubs and bank statements. Most of the time, no paperwork is required or faxing which makes the application process very easy.
Beforing signing up with any lender, it is important to understand the conditions of the loan contract. Borrowers are encouraged to ask about interest rates and rather they are fixed. Loan verification techniques and policies should also be of high concern to the borrower. Try to apply with lenders who are a registered business and are recognized by the state their business resides in. It also helps to get reviews and opionions from past borrowers online.