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Best student loans for bad credit in May 2024

May 03, 2024
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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. They also come with competitive fixed 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 2023-24 school year is 5.50 percent for undergraduates and either 7.05 percent or 8.05 percent for graduates. Private student loan rates currently range from just above 4 percent to around 16 percent — but borrowers with poor credit should expect to receive rates near the top of that band.


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Compare bad- or no-credit student loan rates in May 2024

When shopping for bad- or no-credit student loans, compare the lenders’ interest rates, repayment terms and loan amounts. Use this table to easily compare our top picks for bad-credit borrowers.

Remember that federal student loans’ interest rates are fixed. Everyone who receives one in a given academic year gets the same rate. For private student loans, interest can be fixed or variable and vary by lender. The lowest rates are usually reserved for those with the highest credit scores. Having a low credit score or none at all means you may struggle to be approved. Plus, your rates may be on the higher end of the listed range.

Federal student loans 5.50%-8.05% 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 Fixed: 4.29%-15.76%; Variable: 6.24%-15.85% with autopay 5 to 20 years $2,001* $400,000 Borrowers without a co-signer
Funding U Fixed: 7.49%-12.99% with autopay 10 years $3,001 $20,000 Undergraduate borrowers

*The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.

A closer look at the top student loans for bad credit

The closer look section offers a deep dive into each of Bankrate’s top picks. This includes product highlights and who may benefit the most from applying with these lenders.

Best overall

Min. credit score:
Not disclosed
Fixed APR From:
5.50% –8.05%
Loan amount:
$1,000– $500,000
Term lengths:
10 to 25 years
Min. annual income:
Not disclosed
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 almost every student, 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 Borrowers Without A Co-signer

Min. credit score:
Not disclosed
Fixed APR From:
4.29% –15.76%
Loan amount:
$2,001– $400,000
Term lengths:
5 to 20 years
Min. annual income:
Not disclosed
Overview: In addition to standard co-signed loans, Ascent offers a unique outcomes-based non-co-signed student loan for college juniors and seniors. These loans are based on your future income. You may qualify if you're in a high-earning field of study. Borrowers with over two years of credit history can apply for a non-cosigned credit-based loan if they meet the minimum eligibility requirements.

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 — even if you have no credit.

Best for Undergraduate Borrowers

Min. credit score:
Not disclosed
Fixed APR From:
7.49% –12.99%
Loan amount:
$2,001– $400,000
Term lengths:
10 to 10 years
Min. annual income:
Not disclosed
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 without a credit history and a co-signer. While Funding U limits loan amounts to $20,000 a year, it's worth considering for undergraduates who need funds in addition to 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 few lenders that accept undergraduates with little or no credit history without a co-signer. Even first-year students may apply. In this case, lending decisions will be made on high school academics.

What are bad credit student loans?

FICO scores, which measure how well you’ve managed credit accounts, range from 300 to 850. Many lenders use credit scores to drive their lending decisions. A FICO score of 580 or below is typically considered a bad credit score.

Bad credit student loans are a type of installment loan for those with bad or insufficient credit. Lenders offering these loans consider factors beyond credit scores, like academic performance, enrollment or projected career outcomes, to approve borrowers.

However, interest rates may be higher, as lenders consider these borrowers a higher risk of failing to pay. The only exceptions are federal loans. For these, interest rates are fixed and aren’t based on credit.

How do bad credit student loans work?

Those with poor credit can choose between federal and private student loans. Bankrate recommends that borrowers turn to federal loans first. The Department of Education sets one fixed rate for all federal borrowers, regardless of financial history and credit score.

Plus, they come with payment protections and forgiveness benefits that private lenders don't offer. For example, graduates who work in a public service position for 10 years may be eligible for Public Service Loan Forgiveness.

After applying for federal aid, borrowers can explore other financing options to fill any funding gaps.

Federal student loans

To apply for federal student loans, you just need to fill out the FAFSA. Once that’s processed, your school will send you a financial aid award letter, disclosing your loan eligibility and limit for that specific academic year. The only exception is the PLUS loan. It requires a credit check, though there is no minimum credit score.

If you accept the loan, the funds will be sent directly to your school. Your financial aid office will then deposit it and issue you a check for any leftover amount.

Federal student loans don’t require students to make payments until six months after they graduate or drop below half-time enrollment. For Direct Unsubsidized and PLUS loans, interest will accrue while you’re in school.

Private student loans

Offered by banks, credit unions and online lenders, private student loans often don't come with borrowing caps. They offer a wider range of interest rates based on your credit score. Eligibility requirements vary by lender. To apply for a bad credit student loan, you’ll need to provide the following:

  • Your full name.
  • Date of birth.
  • Social security number.
  • Financial information (income, assets, etc.).
  • Contact information.

If you have a co-signer, they will also have to share these details when you apply. Additionally, you’ll have to enter the program and institution you’re attending.

Lenders often conduct a soft credit pull to see if you qualify for the loan. If you do, you’ll get a loan offer. It will include the amount you’re approved for, repayment term and interest rate.

As with federal loans, the funds will be sent to your school. Any leftover funds will be sent to you.

Some private lenders require full in-school payments or interest-only payments. Others don’t require students to make any payments until after they graduate. However, interest will accrue if you don’t make any payments. Understand your options before you apply. 

Federal vs. private student loans

Here are some of the key differences between federal and private 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 4.00% to 16.00%; may be fixed or variable 5.50% to 8.05% fixed for 2023-24
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 Meet basic eligibility criteria

What if you don’t qualify for a bad credit student loan?

If you don’t qualify for a bad credit student loan, there are several options you can explore. Income share agreements and applying with the help of a co-signer are some of the most common ones.

Student loan alternatives for borrowers with bad credit

Income share agreements

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 (ISAs) give you money for school, then accept a percentage of your monthly income after graduation as payment. When you sign up for an income share agreement, you'll likely receive the following terms:

  • The percentage of your income you'll owe.
  • The minimum and maximum amount you'll be required to pay monthly.
  • Your repayment term.

Income share agreements can benefit borrowers with bad credit since most agreements don't come with strict credit requirements and high interest rates.

However, income share agreement payment amounts change based on income. If your income increases or you end up in a high-paying job, you may have to 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.

Companies offering income share agreements include Edly and Stride Funding.

Applying 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. Therefore, delinquent payments will negatively 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.

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 hurt 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 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. Debts in collections stay on your credit report for seven years, which could drastically reduce your chances of being approved for financing.
  • Dispute credit report errors: Creditors can make mistakes, so it's smart to regularly check your credit reports. Dispute any errors that could be negatively affecting your credit score. You can check your credit reports for free weekly at

But bear in mind that interest rates on federal and private student loans are rising, mainly due to the Federal Reserve’s rate hikes over the past year. Federal student loan rates for the 2023-24 school year are half a percentage point higher than they were in 2022-23. 

Though the Fed is holding rates steady now, the previous rate hikes make it likely that interest rates will be higher next academic year. If you are considering refinancing or taking out a new private loan and don't expect rapid improvement to your credit score, it may be wise to act before rates rise further.

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.

Frequently asked questions

How we chose the best student loan providers for bad credit

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 flexible eligibility requirements and low rates.