Choices of Student Loans for Those with No Credit

Even today, the American Dream is alive and well. This dream promises that if you work hard enough, you’ll be able to achieve everything you want. But in the technology-driven contemporary world, you’ll need more than just a work ethic; you’ll need education. This can be expensive, but you can finance your education by using student loans for those with no credit.

You should first know what your credit rating is. Do the numbers 300 - 850 mean anything to you? If not, you should know that these numbers are used to rank your credit rating. This is a measurement banks use to gauge how "safe" it is to loan money to you. Your credit rating is determined by a variety of factors, mostly your history of loans and repayment, and how you use your credit cards.

Many students who are applying for loans, however, might not have a credit rating at all. If this is your situation, don’t worry. There are many choices available for you to finance your education even if you don’t have credit or a credit rating.

The federal government provides many student loan options for students who have no credit. One of these is called the Stafford Loan, which is available in two types: subsidized and unsubsidized. Another choice is the Perkins Loan. You can also apply for grants and scholarships from the federal government, state government, or private organizations.

The subsidized Stafford Loan is available to students who have the most financial need, and the government pays the interest until you graduate. The unsubsidized Stafford Loan is for all students, regardless of need, but you have to pay the interest on your loan. These loans can sometimes be relatively small, however, so you may have to pursue additional funding.

The Perkins Loan is another good option. This loan is also specifically for students who have the most acute financial need. These loans, which are usually financed by both the government and the institution you attend, provide anywhere from $1,000 to $4,000 each year you are in school. Even better, after you graduate, you get a nine-month "grace period" to pay back loans without interest.

Finally, you should also apply for grants and scholarships, which don’t have to be repaid at all! The federal government offers the Pell Grant, which is reserved for the neediest students. Current legislation is aimed at increasing its funding. Also, no matter what your need, you can apply for no-credit loans from private lenders.

Don’t let a lack of credit stop you from getting an education. You just have to research student loans for those with no credit. And remember, no credit is better than bad credit!