A credit score below 580 can make funding your education difficult, especially if you exhausted federal loans and grants. But there are options out there — just make sure to weigh all of the pros and cons before choosing a lender.
How we picked these lenders
When choosing these three lenders, we looked at the overall quality and prioritized flexible eligibility requirements, low interest rates and high borrowing limits.
3 best private student loans for bad credit
All three of these lenders offer loans that don’t use credit as a factor for approval. So you may be eligible, even with low or no credit.
Ascent is well-known for working with students who struggle with credit and don't have a cosigner. In fact, if you meet all of the other requirements for the loan, credit score isn't even considered. However, loans are capped at $20,000 for borrowers applying for future income-based loans without a cosigner.
Pros
Can apply for loans that aren't credit-based
Transparent terms and costs
Autopay discount and cashback reward available
Cons
Loans capped at $20,000 for noncredit loans
Limited repayment plans for noncredit loans
Freshmen and sophomores are not eligible
Minimum Loan Amount
$2,001
Max. Loan Amount
$200,000
APR
6.16% - 16.10%
Interest Rate Type
Fixed and variable
Fixed rate
4.13% - 15.46%
Minimum Loan Term
5 years
Maximum Loan Term
15 years
Requirements
Student must be US citizen, permanent resident, DACA recipient or US temporary resident, enrolled at least half-time in degree program at eligible institution. Cosigner must be US citizen or permanent resident, have 620+ credit score.
Ascent's undergraduate and graduate student loans are funded by Bank of Lake Mills or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 1/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs require interest-only payments, the shortest loan term, and a cosigner, and are only available to our most creditworthy applicants and cosigners with the highest average credit scores.
Mpower provides loans to international and domestic students who struggle to get funding elsewhere. You don't need to have a cosigner, collateral or credit history. Also, loans are available to students attending school in both the US and Canada.
Pros
No credit score required
Autopay discount available
International students may be eligible
Cons
High interest rates compared to other lenders
Limited terms and repayment plans
Multiple fees
Minimum Loan Amount
$2,001
Max. Loan Amount
$25,000
APR
7.52% to 14.98%
Interest Rate Type
Fixed
Maximum Loan Term
10 years
Requirements
F-1 student visa, attendance at partner university and in last two years of degree program
APR
7.52% to 14.98%
Loan amount
$2,001 - $25,000
Min. Credit Score
Not required
Best for high-performing students
FundingU student loans
FundingU is another lender that doesn't use your credit score to approve or deny your loan. Instead they use their SMaRT (Student Merit and Risk Test) scoring model. This takes into account non-credit variables like your academic success, likelihood to graduate on time and projected earnings for your major. However, the company does not disclose their interest rates online so they could be very high.
Pros
Credit score and debt-to-income ratio aren't used
Provides a dedicated loan advisor who acts as an advocate
Autopay discount available
Cons
Not available in all states
Low maximum loan amounts
Strict GPA and graduation requirements
Minimum Loan Amount
$3,001
Max. Loan Amount
$10,000
APR
7.99% to 13.99%
Interest Rate Type
Fixed
Maximum Loan Term
10 years
Requirements
Strong academics, full-time undergraduate student enrolled in a 4-year Title IV school, resident of eligible state, ages 18+, US citizen or permanent resident.
APR
7.99% to 13.99%
Loan amount
$3,001 - $10,000
Min. Credit Score
Not required
3 more private lenders that allow a cosigner
You may still get approved for a loan with a more traditional lender if you apply with a cosigner. Our top three picks include options for flexible repayments, multiyear approval and less than part-time students.
Best for flexible repayment options
College Ave Student Loan Refinancing
CollegeAve understands that you might not have enough credit history to get a loan on your own, and encourages borrowers to use a cosigner. Once you have the loan, you can choose from multiple repayment plans and loan terms to tailor the loan to your needs.
Pros
Multiple terms available
Competitive low starting rates
Cosigner release options
Cons
Credit requirements aren't transparent
Forbearance and deferment unavailable
Minimum Loan Amount
$5,000
Max. Loan Amount
$150,000
APR
5.24% to 9.99%
Interest Rate Type
Variable
Fixed rate
5.24% to 9.99%
Minimum Loan Term
5 years
Maximum Loan Term
20 years
Requirements
You're a graduate of an approved Title IV undergraduate or graduate program, at least 18 years old and an American citizen or a permanent resident of the US. You meet College Ave Refi’s underwriting requirements.
APR
5.24% to 9.99%
Loan amount
$5,000 - $150,000
Min. Credit Score
680
Best for multiyear approval
Discover undergraduate student loans
Discover is a well-known name for credit cards, but it also offers student loans — generally at pretty fair rates. You can qualify for loans up to your yearly cost of attendance, and you can prequalify for future loans with your initial application. But its required credit score is high, so students who have no credit or low credit will need a qualifying cosigner.
Pros
Multiyear approval available
Offers cash rewards for good grades
No origination or late fees
Cons
Only one term available
No grace period following graduation
Credit requirement of over 660A
Minimum Loan Amount
$1,000
Max. Loan Amount
Cost of attendance
APR
Variable APRs: 1.79% to 11.09% Fixed APRs: 3.99% to 11.59%
Interest Rate Type
Variable
Fixed rate
3.99% to 11.59%
Maximum Loan Term
15 years
Requirements
Must be enrolled at least half-time at an eligible school with satisfactory academic progress and seeking a degree. Must be a US citizen, permanent resident or international student.
APR
Variable APRs: 1.79% to 11.09% Fixed APRs: 3.99% to 11.59%
Loan amount
Starting at $1,000
Min. Credit Score
Not stated
Best for less than half-time students
Sallie Mae® Smart Option Student Loan for Undergraduates
SallieMae has been in the business of private student loans for many years. You can qualify for a Smart Option Student Loan even if you're studying at less than half-time hours. In fact, you can use the loan for single classes, study abroad programs and summer or winter sessions.
Pros
Available for students studying less than half time
Six-month grace period
Autopay discount available
Cons
Not transparent about credit requirements
Potentially high late fees
Preapproval unavailable
Minimum Loan Amount
$1,000
Max. Loan Amount
Cost of attendance less financial aid
APR
4.50% to 15.49%
Interest Rate Type
Variable
Fixed rate
4.50% to 14.83%
Minimum Loan Term
5 years
Maximum Loan Term
15 years
Requirements
US citizens, US permanent residents and international students residing in the US with an unexpired government-issued ID and creditworthy cosigner who is a US citizen or permanent resident
Working around bad credit to get a student loan can take extra research and a dash of creativity. In the meantime, consider these tips:
Exhaust your federal loan options first
Apply for private loans with a cosigner
Take steps to build your credit before applying
Scope out high-earning majors
Rely on the total cost to guide your decision
How much will my loan cost me?
The overall cost of your loan can vary greatly based on factors like amount, loan term, repayment plan and interest rate. To get an idea of what your monthly payments might look like, use our calculator by entering in your potential APR, loan amount and term.
Check out even more options — that don’t require a credit check — before you take out a personal loan.
Work Study. This government-sponsored program assists colleges with employing active students. It allows you to work on campus with a schedule that works around your classes.
Federal loans. If you absolutely need to take out loans, try federal loans first. You’re eligible for some without a credit check.
Scholarships. Tons of different scholarships available, and the best part is the funds don’t have to be repaid. Look for ones that suit you best, and set an intention to apply for more than one.
Crowdfunding. You can also reach out to your community. Try using GoFundMe or a similar crowdfunding site to allow friends and family to donate.
Bottom line
Having bad-credit doesn’t completely nix private student loans as an option. Specialty single-borrower and cosigner friendly loans exist and can help you fund your education — regardless of your credit. If you are looking for even more information on available loans, read our guide to student loans.
Frequently asked questions
A cosigner is as responsible for the loan as you are, which may add pressure to pay it off sooner rather than later. One way to avoid some of this pressure is to compare loans that have a cosigner release option, which removes the cosigner from the loan after repaying a specific amount.
Even a small change in interest can change how much your loans cost overall. Getting a well-qualified cosigner is a great way to change it for the better. But be sure your cosigner is fully on board with the loan before you apply.
No. It’s better to exhaust all options for debt-free funding first. From there you can check out federal loans — and once those are up, private.
Rhys Subitch is a personal finance editor at Bankrate and former loans editor at Finder, specializing in consumer and business lending. Rhys has nearly a decade of experience researching, editing, and writing for startups, Fortune 500 companies, universities and websites. They hold a BA in sociology and a certificate of editing from the University of Washington.
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