2 Student Loan Options For Parents With Bad Credit

If you’d like to help your child pay for college, you might consider taking out student loans. However, parent loans generally require good credit to qualify — which means you might have a hard time getting approved if your credit is less than stellar.

The good news is that you might still be able to get federal or private parent student loans even if you have bad credit.

Here’s what you should know about student loans for parents with bad credit:

  • 2 student loan options for parents with bad credit

  • Next steps if a parent is denied a student loan

2 student loan options for parents with bad credit

If you’re a parent who has bad credit, you might wonder whether you can take out student loans to help your child cover their education costs. Thankfully, two potential options are available to you, including:

Federal Parent PLUS loans

Parent PLUS Loans are a category of federal Direct PLUS Loan available specifically for parents who want to cover their child’s college costs. With a Parent PLUS Loan, you might be able to borrow up to your child’s cost of attendance minus any other financial aid they’ve received.

If you’d like to take out a Parent PLUS Loan, follow these five steps:

  1. Fill out the FAFSA. Your child should complete the Free Application for Federal Student Aid (FAFSA). The school will use these FAFSA results to determine what federal student loans and other federal financial aid your child qualifies for.

  2. Apply for scholarships and grants. Unlike student loans, college scholarships and grants don’t have to be repaid — which makes them a great way to pay for college. There’s no limit to how many scholarships and grants a student can get, so it’s a good idea for your child to apply for as many as they can. Your child could also be eligible for school-based scholarships depending on their FAFSA information.

  3. Take out federal student loans. After your child submits the FAFSA, the school will send them a financial aid award letter detailing what federal student loans — such as Direct Subsidized and Unsubsidized Loans — and other federal financial aid they’re eligible for. They can then decide which aid they’d like to accept. Keep in mind that if your child has to borrow for school, it’s usually best to rely on subsidized and then unsubsidized loans before turning to PLUS Loans.

  4. Complete the Direct PLUS Loan application. If you’d like to also take out a Parent PLUS Loan, you’ll need to fill out a Direct PLUS Loan application at StudentAid.gov. Be prepared to provide personal and financial information for both you and your child. Also note that unlike other federal student loans, PLUS Loans require a credit check. To be eligible, you can’t have an adverse credit history — meaning that your credit report can’t contain negative information (such as defaults, foreclosures, or bankruptcies) for the past five years.

  5. Sign the Master Promissory Note and get your funds. If you’re approved for a Parent PLUS Loan, you’ll need to sign a Direct PLUS Loan Master Promissory Note. After this, the funds will first be released to your child’s school to cover tuition and other expenses. Any remaining money will then be disbursed to you.

In addition to not having an adverse credit history, you’ll also have to meet some other requirements to get a Parent PLUS Loan. For example, you must:

  • Be a U.S. citizen or an eligible noncitizen

  • Be the biological or adoptive parent (stepparents might be eligible in some cases) to a dependant undergraduate student who is enrolled at least half time in an eligible degree or certificate program at school that participates in the federal student aid program

Learn More: How to Get a Student Loan With No Credit Check

Private student loans

After your student has exhausted their scholarship, grant, and federal student loan options, private student loans could help fill any financial gaps left over.

Keep in mind: You’ll typically need good to excellent credit to qualify for a private student loan. A good credit score is usually considered to be 700 or higher.

Some lenders also provide student loans for bad credit that could be easier to qualify for — though keep in mind that these loans usually come with higher interest rates compared to good credit loans.

If you’d like to take out a private student loan to help your child pay for school, follow these four steps:

  1. Check your credit. When you apply for a private student loan, the lender will review your credit to determine your creditworthiness — so it’s a good idea to check your credit beforehand to see where you stand. You can use a site like AnnualCreditReport.com to review your credit reports for free. If you find any errors, dispute them with the appropriate credit bureaus to potentially boost your credit score.

  2. Compare lenders and pick a loan option. Be sure to compare as many lenders as possible to find the right student loan for your needs. Consider interest rates, repayment terms, and any fees charged by the lender. Also review the eligibility requirements for each lender — for example, some lenders work with borrowers who have poor or fair credit while others don’t. After comparing your options, choose the loan option that works best for your needs.

  3. Complete the application. Once you’ve picked a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs. Also be prepared to provide information regarding your student and their school.

  4. Get your funds. If you’re approved, the lender will send the loan to the school for certification — this process could take anywhere from a few weeks to a couple of months, depending on the school. Afterward, the loan funds will be disbursed to the school to cover expenses like tuition, and any remaining money will be refunded to you.

Before you take out a private student loan, remember to consider as many lenders as you can to find the right loan for your situation.

Credible makes this easy — you can compare your prequalified rates from our partner lenders in the table below in just two minutes. Keep in mind that while some of these lenders have high required minimum credit scores, you might be able to qualify if you apply with a creditworthy cosigner.

Lender

Fixed rates from (APR)

Variable rates from (APR)

Loan amounts

Min. credit score



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.87%+

1.46%+

$2,001 to $200,000

540

  • Fixed APR: 3.87%+

  • Variable APR: 1.46%+

  • Min. credit score: 540

  • Loan amount: $2,001 to $200,000

  • Loan terms (years): 5, 7, 10, 12, 15, 20

  • Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability

  • Fees: None

  • Discounts: 0.25% to 1.00% automatic payment discount, 1% cash back graduation reward

  • Eligibility: Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program

  • Customer service: Email, phone

  • Soft credit check: Yes

  • Cosigner release: After 24 months

  • Loan servicer: Launch Servicing, LLC



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.48%+1

N/A

$1,000 to $350,000
(depending on degree)

720

  • Fixed APR: 3.48%+1

  • Variable APR: N/A

  • Min. credit score: 720

  • Loan amount: $1,000 to $350,000

  • Loan terms (years): 5, 10, 15

  • Loan types: Any private or federal student loan

  • Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability

  • Fees: Late fee

  • Discounts: Autopay, loyalty

  • Eligibility: Available in all 50 states (international students can apply with a creditworthy U.S. citizen or permanent resident cosigner)

  • Customer service: Email, phone, chat

  • Soft credit check: Yes

  • Cosigner release: After 36 months

  • Loan servicer: Firstmark Services



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

2.99%+2,3

0.94%+2,3

$1,000 up to 100% of the school-certified cost of attendance

Does not disclose

  • Fixed APR: 2.99%+2,3

  • Variable APR: 0.94%+2,3

  • Min. credit score: Does not disclose

  • Loan amount: $1,000 up to cost of attendance

  • Loan terms (years): 5, 8, 10, 15, 20

  • Repayment options: Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disability

  • Fees: Late fee

  • Discounts: Autopay

  • Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.

  • Customer service: Email, phone

  • Soft credit check: Yes

  • Cosigner release: After 24 months

  • Loan servicer: College Ave Servicing LLC

custom choice



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.2%+

1.03%+

$1,000 to $99,999 annually
($180,000 aggregate limit)

Does not disclose

  • Fixed APR: 3.2%+

  • Variable APR: 1.03%+

  • Min. credit score: Does not disclose

  • Loan amount: $1,000 to $99,999 annually ($180,000 aggregate limit)

  • Loan terms (years): 7, 10, 15

  • Repayment options: Full deferral, immediate repayment, interest-only repayment, flat/full repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability

  • Fees: None

  • Discounts: Autopay

  • Eligibility: Not available to residents of AZ, IA, or WI

  • Customer service: Phone, email

  • Soft credit check: Yes

  • Cosigner release: After 36 months

  • Loan servicer: American Education Services

  • Min. income: Does not disclose

edvestinu student loan refinance



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.02%+7

2.51%+7

$1,000 to $200,000

750

  • Fixed APR: 3.02%+7

  • Variable APR: 2.51%+7

  • Min. credit score: 750

  • Loan amount: $1,000 to $200,000

  • Loan terms (years): 7, 10, 15

  • Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, loans discharged upon death or disability

  • Fees: Late fee

  • Discounts: Autopay

  • Eligibility: Must be a U.S. citizen or permanent resident and have a minimum income of $30,000.

  • Customer service: Email, phone

  • Soft credit check: Yes

  • Cosigner release: After 36 months

  • Loan servicer: Granite State Management & Resources (GSM&R)



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.33%+8

1.69%+8

$1,001 up to 100% of school certified cost of attendance

670

  • Fixed APR: 3.33%+8

  • Variable APR: 1.69%+8

  • Min. credit score: 670

  • Loan amount: $1,001 up to cost of attendance

  • Loan terms (years): 5, 10, 15

  • Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance

  • Fees: Late fee

  • Discounts: Autopay, reward for on-time graduation

  • Eligibility: Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school

  • Customer service: Email, phone, chat

  • Soft credit check: Yes

  • Cosigner release: After 48 months

  • Loan servicer: American Education Services



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.75%+

N/A

$1,500 or $2,000 up to school’s certified cost of attendance
(depending on school type and minus other aid received)

670

  • Fixed APR: 3.75%+

  • Variable APR: N/A

  • Min. credit score: 670

  • Loan amount: $1,500 up to cost of attendance less aid

  • Loan terms (years): 10, 15

  • Repayment options: Full deferral, interest only, immediate repayment, academic deferral, forbearance

  • Fees: None

  • Discounts: None

  • Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress.

  • Customer service: Email, phone

  • Soft credit check: Yes

  • Cosigner release: After 48 months

  • Loan servicer: American Education Services (AES)



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

5.99% - 24.99% APR

N/A

$5,000 to $40,000

600

  • Fixed APR: 5.99% - 24.99% APR

  • Min. credit score: 600

  • Loan amount: $5,000 to $40,000

  • Loan terms (years): 2, 3, 4, 5

  • Time to fund: As soon as 2 - 5 business days after verification

  • Fees: Origination fee

  • Discounts: None

  • Eligibility: Available in all states except MA, NV, and OH

  • Customer service: Phone, email, chat

  • Soft credit check: Yes

  • Min. Income: None

  • Loan Uses: Debt consolidation and credit card consolidation only



Credible Rating
Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.

3.5% - 12.6% APR9

1.13% - 11.23% APR9

Up to 100% of school-certified cost of attendance

Does not disclose

  • Fixed APR: 3.5% - 12.6% APR9

  • Variable APR: 1.13% - 11.23% APR9

  • Min. credit score: Does not disclose

  • Loan amount: $1,000 up to cost of attendance

  • Loan terms (years): 10 to 15

  • Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disability

  • Fees: Late fee

  • Discounts: Autopay

  • Eligibility: Must be a U.S. citizen or permanent resident. Also available to non-U.S. citizen students (including DACA students) attending a school located in the U.S. who apply with a qualifying cosigner.

  • Customer service: Phone, chat

  • Soft credit check: Yes

  • Cosigner release: After 12 consecutive on-time payments

  • Loan servicer: Sallie Mae

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Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Disclosures | 2,3College Ave Disclosures | 7EDvestinU Disclosures | 8INvestEd Disclosures | 9Sallie Mae Disclosures

Check Out: 3 Best Private Student Loans That Don’t Require a Cosigner

Next steps if a parent is denied a student loan

If you’re struggling to qualify for a student loan or your application was denied, here are several options that could help:

  • Explain if you have extenuating circumstances. If your Parent PLUS Loan application was turned down and you have extenuating circumstances, you might be able to appeal the decision. You’ll need to submit documentation as well as a written statement that clearly illustrates your financial circumstances — either through the school’s financial aid office or online at StudentAid.gov.

  • Apply for a higher amount of unsubsidized loans. If you’re ineligible for a Parent PLUS Loan, your child might be able to borrow a higher amount of Direct Unsubsidized Loans. They’ll need to contact the school’s financial aid office for more information. Keep in mind that unlike with undergraduate subsidized loans, your child will be responsible for all of the interest that accrues on unsubsidized loans.

  • Apply with an endorser. If you have an adverse credit history and don’t qualify for a Parent PLUS Loan, consider applying with an endorser. This can be anyone except for your student who doesn’t have an adverse credit history and who is willing to share responsibility for the loan.

  • Apply with a cosigner. If you have poor or fair credit, applying with a creditworthy cosigner could help you get approved for a private student loan. Just keep in mind that if you don’t keep up with your payments, your cosigner will be on the hook.

  • Improve your credit. If you can wait to take out a student loan, it could be a good idea to work on improving your credit score to make it easier to qualify in the future. Some potential ways to build your credit include paying all of your bills on time, paying down credit card balances, or getting a credit-builder loan.

If you’re ready to apply for a private student loan, remember to shop around and consider as many lenders as possible to find the right loan for your needs. This is easy with Credible — you can compare your prequalified rates from multiple lenders in two minutes.

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Keep Reading: How to Get Student Loans, Grants, and More for Adult Learners