Applying for an Education Loan with Bad Credit

By Lauren Vourensty

It is possible to get bad credit student loans, but like any other loan to someone with a bad credit history they bring snags. Many students are worried about the costs of attending university and wonder if they will be saddled with a huge bill to repay over a long time, once they have finished their studies. For this reason many are tempted to take out other loans with shorter repayment periods to help see them through. However this is not always the best idea.

The usual route for students in the UK to get loans to see them through university is through the student loans scheme. From 2012 there will be two student loan types available. In general, providing they meet the criteria to qualify, they will get the, loan regardless of credit history.

There will be a loan for tuition fees, available to all students, and one for maintenance and living costs, available to full-time students only.Obviously these loans do not always provide enough money for many students. If the university they attend is in a popular area, housing costs may swallow the whole loan almost immediately.

In this situation many students may begin to have difficulties with their finances. Instead of forward planning by working between leaving school and starting university, and in the holidays once they have started, so they have some other sources of finance, they start searching other ways to cover their costs. Credit cards are one easy way of getting more money, but they soon reach the limit and start to default on payments.

In the meantime their overdraft may have often gone over the limit. The banks will help them at first, but will soon become tougher if agreements are not kept to. Debit cards and cheque books may be recalled, or their use limited to when the account is back within agreed limits.

When this happens students begin looking around for other types of finance. There are many but they are costly. When searching online for lenders that deal with students who have poor credit records I found several sites. They were badly written in the main and did not read as native English, which should set off alarm bells. They also just directed you on to other websites.

The initial websites claim that they have no fees, but, as they are merely redirecting you, there is nothing to pay for. However, when you eventually get to the lender’s website, somewhere in small print you’ll find what will happen if you miss any payments and the real cost. It will certainly not make comfortable reading. It has been known for lenders to charge as much as 35%.

You can avoid this by developing good financial habits from the beginning. If you work whenever you can, you will be able to build up savings to help you. Another good thing to learn is how to manage your spending and how to budget. Doing this will ensure that you never need to look for bad credit student loans.

The author is a highly regarded education expert who writes about getting student loans without cosigner.

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