Best student loans for bad credit or no credit in December 2024

Written by
Hanneh Bareham
Edited by
Pippin Wilbers
Reviewed by
Mark Kantrowitz
Edited by
Pippin Wilbers
Reviewed by
Mark Kantrowitz
Updated Dec 17, 2024

What to know first: Regardless of the student loan type, it's best to start with federal loans. Most don’t require a credit check, and they come with competitive fixed rates and robust borrower protections. You can also pursue private student loans to supplement federal funding.

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Compare top bad credit student loan lenders 

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.
LENDER BEST FOR MIN. CREDIT SCORE Variable APR Fixed APR MIN. LOAN AMOUNT MAX. LOAN AMOUNT
Overall student loans None N/A 6.53%-9.08% None $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduate students
Ascent Borrowers without a cosigner Not Specified 5.50%-15.04% (with autopay) 3.69%-15.28% (with autopay) $2,001* $400,000
Funding U Undergraduate borrowers None N/A 8.49%-13.99% with autopay $3,001 $20,000
MPower International students None N/A Starting at 13.72% with autopay $2,001 $100,000
Edly Income-based repayment Not specified N/A 8.49%-25.96% $5,000 $20,000

*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

Before you choose a lender, take a deep dive into each of Bankrate’s top picks. These breakdowns include product highlights and who may benefit the most from applying with these lenders.

Federal student loans: Best for overall student loan

Federal Student Loans
4.6

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.

Read Bankrate's Expert Federal Student Loan Review
Fixed APR
6.53%–9.08%
Loan amount
$5,500- $12,500 per year (up to $57,500 in total)
Loan term
10-25 yrs

Ascent: Best for borrowers without a cosigner

Ascent
4.5

Overview: In addition to standard cosigned loans, Ascent offers a unique outcomes-based non-cosigned 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.

Read Bankrate's Expert Ascent Review
Fixed APR
3.69%–15.28%
Loan amount
$2k– $400k
Loan term
5-20 yrs

Funding U: Best for undergraduate borrowers

Funding U
3.2

Overview: Funding U does not use credit scores to make lending decisions. Instead, it considers an individual borrower's academic achievements, career path and GPA alongside credit history — like late payments and collections items. This makes it a great option for borrowers without a credit history or a cosigner. 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.

Read Bankrate's Expert Funding U Review
Fixed APR
8.49%–13.99%
Loan amount
$3k– $20k
Loan term
10-10 yrs

MPower: Best for international students

MPower Financing
3.4

Overview: Founded by two international students in 2014, MPower is one of the few student loan servicers that has flexible citizenship and residency requirements. Though all services are provided completely online, MPower does have two offices — one in the U.S. and the other in India.

Read Bankrate's Expert MPower Review
Fixed APR
10.89%
Loan amount
$2k– $100k
Loan term
10-20 yrs

Edly: Best for income-based repayment

Edly
3.5

Overview: Edly is one of the few student loan companies on the market that offers income-based repayment (IBR) loans. Based in New York, the company touts its products as a private student loan alternative due to its affordability and unique payment structure. The lender also claims that borrowers without a cosigner are three times more likely to get approved than they would with a traditional lender. 

Read Bankrate's Expert Edly Review
Fixed APR
8.49%–25.96%
Loan amount
Not specified
Loan term
5-7 yrs

What is a bad credit student loan? 

A bad credit student loan is a private or federal student loan that's tailored to individuals with a poor credit score — 580 or lower — or thin credit history. Like other student loans, they can only be used for approved academic related expenses, like tuition, books or room and board.

Most private student loan lenders require that borrowers be in excellent financial shape or have a creditworthy cosigner to get approved. However, lenders that cater to students with bad credit consider factors beyond their score, like academic performance, enrollment or projected career outcomes.

How bad credit student loans work 

Bad credit student loans are distributed by the Education Department or by a private loan servicer. Funds are often sent directly to your school and are reflected in your student account, rather than your bank account. 

It's common for bad credit lenders to tack on higher interest rates and offer smaller loan amounts than you'd get with a traditional student loan. This is because the lender assumes less risk with creditworthy borrowers. So, it's important to maximize your federal student loans before turning to private regardless of your credit standing. If you do need to take out a private loan, having a creditworthy cosigner can help improve your rate and loan terms. 

Bad credit student loans come with usage restrictions that are set by each lender. However, some private lenders are more lenient than others. For example, one lender may approve necessary technology expenses, like a laptop or tablet, while another could prohibit technology purchases. 

Types of bad credit student loans

Federal and private student loans are the two primary types of bad credit student loans. Aside from using a cosigner with good credit on a student loan, there aren't many other options for borrowers. 

Some schools offer private loans or need-based aid through the financial aid office. However, these may come with higher rates or could come with strict application timelines, so do your research and consult the aid office before applying. 

Pros and cons of bad credit student loans 

Taking out student loans can be an overwhelming process, especially for those with less-than-ideal credit. For most, a college education is a hefty expense so it's important to look at the potential advantages and disadvantages that come with a bad credit student loan.

Green circle with a checkmark inside

Pros

  • Flexible eligibility: Most bad credit loans advertise flexible eligibility requirements and gauge approval on multiple factors, not just credit score.
  • Can help you build credit: Consistently making your monthly payments will improve your repayment history, which makes up the largest portion of your FICO credit score.
  • Cosigner optionality: Many student loan lenders require a cosigner; they can be helpful when you have bad credit. There are also some bad credit lenders that don't require a cosigner.
Red circle with an X inside

Cons

  • Higher interest rates: Bad credit loans come with higher interest rates than other student loans. If you have a large loan and a high rate, you could be on the hook for thousands of dollars in accrued interest on top of your principal loan amount.
  • Smaller borrowing amounts: Many private student loan lenders offer loans that cover up to the total cost of attendance, but it's harder to qualify for a larger loan with a low credit.
  • Potential credit risk: If you fail to make the monthly payments your credit could suffer, making it harder to get approved for other loans or products in the future.

Federal vs. private bad credit student loans 

Federal and private bad credit student loans serve the same purpose but are very different when it comes down to the details. 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 $400,000 as per the featured lenders $7,500 annually for dependent undergraduates, $12,500 annually for independent undergraduates and 100% total cost of attendance for graduates
Interest rates Around 4% to 17%; may be fixed or variable 6.53% to 9.08% fixed for 2024-25
Fees Varies by lender Origination fee of 1.057% to 4.228%
Benefits Choice between fixed and variable rates, may be able to use a cosigner for better 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; may require a creditworthy cosigner Meet basic eligibility criteria

How to get a student loan with bad credit

Federal student loans don't rely on creditworthiness for approval or rates, making them the best option for getting a student loan with bad credit. To get federal loans, you'll need to fill out the Free Application for Federal Student Aid (FAFSA). This application opens on Oct. 1 for the following school year, and it's best to apply early.

If you need more funding than federal student loans offer, consider applying with a private lender. Applications for bad credit loans are often online and quick to complete. Before diving straight into the application, familiarize yourself with the steps and what the lender needs from you.  

  1. Calculate how much you need: Your cost of attendance will determine which lenders and types of loans you look for. Federal student loans typically have lower loan limits than private student loans, so you may need to combine multiple loan types.
  2. Fill out the FAFSA: The FAFSA determines what type of federal need-based aid you may be eligible for, and it's also required if you want access to federal student loans. 

If you require more funding than what federal student loans offer, you should consider applying with a private lender. The application for bad credit loans is often completed online and is a quick process. Before diving in, familiarize yourself with the steps and what the lender needs from you.  

  1. Compare rates and terms: If you have less-than-stellar credit, your best bet is applying for a federal student loan. However, if you're considering private loans, prequalify with multiple lenders to compare rates and terms.
  2. Consider a cosigner: If you have thin or no credit history, you should also consider getting a cosigner for your loan. A cosigner with a good credit score can improve your eligibility odds. Some lenders require undergraduate applicants to add a cosigner.

Alternatives to student loans 

If you don’t qualify for a bad credit student loan, there are several options you can explore, including not going to a four-year school altogether.

Before setting your sights on that degree, ask yourself the following questions:

  • Is there an online coding bootcamp or certification program that I could enroll in?
  • Does my career field absolutely necessitate a degree? 
  • What is the ROI of my degree?
  • Is there an apprenticeship program that suits my career goals? 

Keep in mind that some of the alternatives below are school dependent, but it doesn't hurt to look through every possibility. 

Ask the experts: Can a student loan help you build a better credit score?

Mark Kantrowitz

Nationally recognized student financial aid expert

"Student loans can help you build a better credit score if you make every required payment on time, by the due date. Whatever you do, don’t default and don’t be late with a payment or skip a payment. This can ruin an otherwise good credit score. Sign up for autopay, where the monthly payment is automatically transferred from your bank account to the lender. Not only are you less likely to be late with a payment, but many lenders will reduce your interest rate as an incentive."

Hanneh Bareham

Writer, Personal Loans and Debt Relief

"A student loan can be instrumental in building up a credit score, but only if you make the payments as scheduled. Thirty-five percent of your FICO credit score consists of your repayment history. Consistently making the monthly payments on time and in full is a sure-fire way to see your score grow. Don't be alarmed if you see your score decrease after applying or after paying down your loan. Those drops are temporary and can be quickly improved with positive repayment habits."

Repaying a bad credit student loan 

Federal direct loans come in two forms, subsidized and unsubsidized. Subsidized loans have an interest-free six-month grace period after graduation. Federal unsubsidized loans begin accruing interest immediately after disbursement, but borrowers aren't required to make payments while in school.

Private student loans operate a bit differently, with some lenders requiring full or interest-only payments while enrolled. Others may not require payments until graduation, but keep in mind that interest will accrue during this time unless stated otherwise. 

Although each private lender is different, most have a couple fixed repayment options for borrowers to choose from that can range anywhere from five to 25 years. Some may offer alternative repayment plans or temporary hardship forbearance, but this isn't common. 

On the other hand, federal loans have a variety of forgiveness and repayment options, including fixed repayment options that last between 10 and 30 years. Borrowers who qualify can also enroll in an income-driven repayment (IDR) plan or an occupation-based plan, like Public Service Loan Forgiveness. These plans lower the borrower's monthly payment and forgive the remaining debt after making 20 to 25 years of qualifying payments.  

Frequently asked questions

How we chose the best bad credit student loan providers  

Bankrate's trusted personal loans industry expertise

Read our full methodology

48

years in business

25

lenders reviewed

14

loan features weighed

350

data points collected

The Bankrate team evaluated over two dozen lenders to select our top picks for the best student loans. To do this, Bankrate uses a 16-point system to evaluate student loan lenders. This scoring criteria measures how lenders perform across three main categories.

Editorial disclosure: All reviews are prepared by Bankrate.com staff. Opinions expressed therein are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in the review is accurate as of the date of the review. Check the data at the top of this page and the lender’s website for the most current information.