9
Best Student Loans For Bad Credit
Featured Partner Offers
College Ave
3.89% to 17.99%¹
2.49% to 17.99%¹
Sallie Mae
3.75% to 16.37%
2.89% to 17.49%
Ascent
3.65% to 16.56%*
2.69% to 16.86%*
Compare the Best Student Loans for Bad Credit of 2026
| COMPANY | FORBES ADVISOR RATING | FIXED APR | MINIMUM CREDIT SCORE | LEARN MORE |
|---|---|---|---|---|
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2.50% to 16.58%
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Mid-600s
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Via Credible.com’s Website
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|
2.89% to 17.49%
|
Not required
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From Sallie Mae
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3.35% to 17.17%
|
Not required
|
Via Credible.com’s Website
| |
|
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6.39%
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None
| ||
|
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Starting at 8.49%
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None
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Via Credible.com’s Website
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Best Bad Credit Student Loans of 2026: A Closer Look
Best Student Loan With Low Rates and No Fees
Abe
Fixed APR
2.50% to 16.58%
Minimum Credit Score
Mid-600s
2.50% to 16.58%
Mid-600s
Launched in 2024, Abe provides low rates and valuable borrower benefits. For example, we like that Abe offers a 0.25% rate discount if you sign up for autopay, and you can earn an additional rate discount of up to 0.25% for consistently making on-time payments. There’s also a graduation reward benefit that can reduce your principal balance by 2% after you complete your degree.
A downside of Abe loans is that payments start six months after leaving school. In comparison, other lenders may give you a guaranteed nine months or even longer to get financially stable before you have to start paying.
- DACA recipients and international students can qualify with a co-signer
- Co-signer release offered after 12 months of payments
- Up to 12-month grace period
- No income-based repayment option offered
- No dedicated customer support representative
- Young lender with only two years in business
Lender Details
Loan terms
five, seven, 10, 15 and 20-year terms
Loan amounts
Up to the total cost of school, with a maximum of $99,999 per academic year. Aggregate limit of $225,000 for undergraduate and graduate loans (unless borrowing with a co-signer); $350,000 aggregate limit for specialty loans, such as dental or medical loans
Eligibility
There are no minimum credit score or income requirements disclosed by Abe for primary borrowers or co-signers. However, applicants must be enrolled at an eligible degree-granting institution, reach legal age of majority in their state or be an applicant with a qualifying co-signer.
Forbearance options
Forbearance may be offered in three-month increments, up to 12 months total, for financial hardship, natural disaster or a preexisting and persisting medical condition.
Co-signer release policy
Co-signer release is available after 24 consecutive months of on-time payments. Periods during which borrowers use income-based repayment do not qualify.
Best Student Loan for Professional Training and Trade Certifications
Sallie Mae
Fixed APR
2.89% to 17.49%
Minimum Credit Score
Not required
2.89% to 17.49%
Not required
We like that Sallie Mae loans can finance school costs for students who are enrolled full time, half time or less than half-time. Students choosing trade career paths, such as carpentry or plumbing, may also use Sallie Mae loans to pay for the required education.
Additionally, borrowers get access to free monthly FICO Score updates, a beneficial feature for those building or rebuilding credit. However, we dislike that Sallie Mae doesn’t offer the option to check interest rates without impacting your credit, unlike many other lenders.
- Provides rate discounts for using autopay
- Accepts students enrolled less than half time
- Offers free FICO Score monitoring
- Charges late fees
- Limits forbearance to six months
- Limits payment grace period to six months
- Does not provide an option to prequalify without a hard credit check
Best Student Loan for Borrowers Without a Co-Signer
Custom Choice
Minimum Credit Score
Not required
Fixed APR
3.35% to 17.17%
Not required
3.35% to 17.17%
Custom Choice is a trademark of Monogram LLC, which is the company that’s also behind Abe loans. We love that Custom Choice offers no fees, including late fees. What’s more, if you take out a loan from Custom Choice, subsequent loans may have a higher chance of approval.
Custom Choice borrowers who graduate may qualify for a graduation reward, which is a 2% reduction in loan principal. One sticking point is that if you use a co-signer to apply for a loan, that person must stay on your loan for at least three years. Other lenders may allow a co-signer to be released from the loan after 12 to 24 years.
- Provides discounts for using autopay
- Offers a graduation reward of 2% reduction in the loan principal
- Charges no late fees
- Co-signer release is not available until after repayment of principal and interest*
- Graduation reward only applied once during the life of the loan
- Customer service hours not listed
Lender Details
Loan terms
five, seven, 10, 15 or 20 years
Loan amounts
$1,000 to $300,000 aggregate undergraduate limit, $1,000 to $350,000 graduate aggregate limit
Eligibility
Borrowers must be U.S. citizens, permanent residents or eligible non-citizens (DACA recipients). Eligible non-citizens must apply with a creditworthy co-signer who is a U.S. citizen or permanent resident.
Forbearance options
Forbearance is available in increments of up to two months with a 12-month cap over the life of the loan.
Co-signer release policy
Co-signer release is available upon entering repayment of principal and interest.*
Disclosures
*A cosigner may be released from the loan upon request to the Servicer, provided that the student borrower has met certain credit and other criteria at the time of the request. Use of an approved reduced repayment plan will disqualify the loan from being eligible for this benefit. If a request for cosigner release is denied, reapplication is not permitted for at least 12 months from the previous cosigner release application date.
Best Student Loan With No Credit Check
Federal Direct Subsidized Loans
Fixed APR
6.39%
6.39%
Interest rates on federal loans are the same for all borrowers, regardless of credit, making them an excellent option for independent students with limited credit or poor credit. In fact, we recommend considering federal loans first before reviewing other private loan options.
Federal loans come with multiple benefits, including income-driven repayment plans, loan forgiveness programs and ways to pause payments for an extended time during financial hardship.
- Low fixed interest rate
- Multiple repayment and forgiveness options available
- Interest subsidy while in school, grace period and deferment period
- 1.057% loan origination fee applies
- Low annual loan limits
- Grace period limited to six months
Loan terms: 5, 7, 10, 15 and 20 years
Loan amounts available: $5,000 minimum; no maximum, except for associate’s degree graduates, who can refinance up to $50,000.
Eligibility: Must be enrolled at least half-time in a school that participates in the federal direct loan program. Must be an undergraduate and be determined to have financial need.
Forbearance options: Forbearance available for up to three years in certain circumstances. Enrolling in an income-driven repayment program can lower monthly payments and result in loan forgiveness after 20 to 25 years.
Best Student Loan for High-Achieving Students
Funding U
Fixed APR
Starting at 8.49%
Starting at 8.49%
Funding U approves borrowers for loans by considering factors like academic achievement, course load and projected future earnings. Interest rates on Funding U loans may be high, but borrowers can qualify for a 0.50% rate discount for using autopay.
- No late fees or prepayment penalties
- Only soft credit check needed for pre-approval
- Payment postponement available in case of hardship
- Limited to five- or 10-year loan terms
- No options for international students
- Loans limited to $20,000
Loan terms
10 years
Loan amounts
$3,000 to $20,000 per year ($100,000 per student aggregate)
Eligibility
Students must meet GPA requirements and attend colleges that meet certain six-year graduation rate thresholds, depending on the student’s year in school.
To qualify, first-year students must have a minimum high school GPA of 3.5, second-year students must have a minimum college GPA of 3.0, juniors must have a minimum GPA of 2.75 and seniors must have a minimum GPA of 2.5.
Note that only borrowers in these states can apply: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia and Wisconsin.
Forbearance options
Up to 24 months of forbearance is allowed in 90-day increments. Borrowers must pay $30 per month while in forbearance, which is less generous than other lenders’ payment-free forbearance. However, this policy helps borrowers avoid large amounts of interest.
Co-signer release policy
Co-signers not permitted
Most Popular is calculated from the number of times each affiliate product was selected by Forbes Advisor users over a six month time period.
Student Loan Options for Borrowers With Bad Credit
Both federal and private student loans may be available to borrowers with bad credit. Here’s an overview of how each type of loan works.
Federal Student Loans
Subsidized and unsubsidized federal loans don’t require a credit check. The total amount you can borrow is $57,500 for undergraduate loans and $138,500 for graduate or professional student loans.
Direct PLUS loans don’t have a borrowing limit, but they do require a credit check. That said, you can still qualify with bad credit so long as you don’t have any adverse credit history.
Adverse history includes:
- Debt totaling $2,085 that is 90 days or more delinquent
- Debt totaling $2,085 that was placed in collections or charged off within the last two years
- Default, discharge of debts in bankruptcy, foreclosure or repossession, tax lien, wage garnishment or write-off of federal student aid debt within the last five years
Students and parents with adverse credit histories can still be approved for direct PLUS loans by going through credit counseling and adding a loan endorser, which is similar to a co-signer.
No matter your credit score, federal loans taken out between July 1, 2025, and July 1, 2026, have the following interest rate.
| LOAN TYPE | FIXED INTEREST RATE |
|---|---|
|
Undergraduate Direct Unsubsidized Loans & Direct Subsidized Loans
|
6.39%
|
|
Graduate & Professional Direct Unsubsidized Loans
|
6.39%
|
|
Direct PLUS loans
|
8.94%
|
Consider using all available federal aid, including federal loans, before taking out private loans. That’s because federal loan rates are not set based on your credit. Plus, federal loans provide borrower benefits like deferment while in school, forbearance, forgiveness programs and income-driven repayment (IDR) plans.
Private Student Loans
Credit plays a significant role in whether private student loans are approved and at what interest rate. The credit score needed for private loans varies.
Private lenders understand that students likely have limited credit history, so borrowers can often apply with a co-signer. In some cases, lenders even offer co-signer release, which allows your co-signer to be removed from your loan after a certain amount of time.
The best co-signer is someone who has:
- Good or excellent credit. Credit score of 670 or higher.
- Stable income. Reliable income shows lenders that your co-signer has the financial means to help pay debt if you cannot make payments.
- Low debt balances. The debt-to-income (DTI) ratio compares monthly debt obligations to monthly income to measure a borrower’s ability to afford payments. Low debt can contribute to a lower DTI, which signals to lenders that your co-signer is a lower credit risk.
If you’re not able to qualify for a competitive rate on your first student loan, you may be able to refinance student loans for a better rate when your credit improves.
How To Compare Student Loans
When you need a private student loan with bad credit, shopping around is important.
Otherwise, you could get stuck in a loan with monthly payments that are difficult to manage after graduation. Below are loan factors to compare when loan shopping:
- Eligibility requirements: Some lenders list minimum income and credit requirements on their websites, which you can review to determine which lender best fits your situation.
- Interest rates: Interest rates on private student loans may be fixed or variable. Fixed rates stay the same for the entire term, while variable rates can adjust at set periods.
- Fees: The best private student loans usually have no origination fees. However, it’s still worthwhile to check for and compare any other costs, such as late fees.
- Terms: Loan terms for private student loans may range from five to 20 years. Compare monthly payments for different terms to find a loan that best fits your budget.
- Borrower benefits: While private loans may not offer benefits as generous as federal loans, some lenders may provide deferment or forbearance in certain situations. The payment relief options vary and can be a lifeline if you fall on hard times.
How To Qualify for Private Student Loans for Bad Credit
Following the steps below can put you on the right path to getting a loan with bad credit.
- Fill out the Free Application for Student Aid (FAFSA). Filling out the FAFSA annually puts you in the running for federal aid, including no-credit-check federal loans.
- Review minimum requirements. When applying for private loans, create a short list of lenders you may qualify for based on minimum income and credit requirements.
- Confirm loan eligibility. Lenders require you meet certain conditions, such as being a U.S. citizen or being enrolled at least half time in an eligible institution. Review each of the requirements to narrow down the best options.
- Prequalify for multiple loans. Many private lenders allow applicants to prequalify and check rates without a hard credit inquiry. Prequalifying for many loans with a soft inquiry is a way to compare personalized rates before making a final loan decision.
- Get a co-signer. Lenders may offer the best rates to borrowers with co-signers, so ask if a family member or friend can back your loan. Be sure to make payments on time if you use a co-signer because missing payments can destroy your and your co-signer’s credit.
- Complete the whole application. After you choose a loan, you’ll complete the full application, which typically includes a hard credit check and an enrollment verification.
- Get loan funding. Once loans are approved, funds are often sent directly to the school to cover tuition and fees. Any money left over can be used for additional school expenses, such as books or room and board.
Alternatives to Student Loans
Student loans are just one way to pay for school. Using loans in combination with the options below could help reduce your debt obligations after school.
- 529 Education Savings: 529 accounts are tax-advantaged accounts you can use to save up for yourself or others’ education. It’s never too early (or late) to start saving. Even a small sum can offset borrowing needs.
- Grants: Grants are free money you can get from filling out the FAFSA. Companies and nonprofits may also offer education grant programs.
- Scholarships: The government and other organizations may offer scholarships based on financial need or merit. Fastweb.com is a website database that students can use to research scholarships available.
- Work study: Take advantage of work study if it’s included in your financial aid package. Work study provides an off-campus or on-campus job that can help pay for school costs.
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Frequently Asked Questions (FAQs)
What student loans are good for bad or no credit?
Federal student loans are likely the best option for borrowers with bad credit because they usually don’t require a credit check, and interest rates are not set based on your credit score. Instead, every borrower gets the same rate regulated by the government.
Can you get student loans with a 500 credit score?
Yes, borrowers may qualify for federal student loans with a 500 credit score. It can be harder to obtain a private student loan with a credit score this low. However, applying with a creditworthy co-signer can help increase your approval odds and lower your interest rate.
Can you get a student loan if you have no credit?
You can get federal loans with no credit or limited credit. Private student loans may also be available to borrowers without credit, but you might need to apply with a co-signer.
Can parents get federal loans with bad credit?
If parents have negative credit report records, such as accounts in collections or recent bankruptcy, they may need to apply for federal parent loans with an endorser and take a credit counseling class to get approved.