As a parent with bad credit, trying to help your children get money for college can be frustrating. Student loans for parents with bad credit can be hard to come by, but there are ways you can help. There are some loans you can get even with bad credit as well as other financial alternatives.
Most likely you’ve already explored your options with federal loans and financial aid along with your student son or daughter. If you are in financial difficulties, your student may benefit. Check if he or she is eligible for financial aid or need-based scholarships or subsidized loans. The best starting point in gathering education funds is the Stafford loan. This does not have any credit requirement, so get this loan and any subsidized loans you can first, then see how much you’ll need to borrow from private lenders.
You may be eligible to cosign for your children’s student loans even with bad credit, especially if you have a steady employment record to counterbalance credit problems. Offering to cosign your son or daughter’s student loans can help despite your bad credit because lenders will see that you are backing up your student and may offer lower interest rates and fees.
There are many lenders and you are unlikely to receive a flat refusal unless your credit and debt is exceptionally bad. They will compete for the privilege of giving you a student loan for your son or daughter’s education; as filing for bankruptcy will not expunge student loan debts, it is a safe and lucrative investment for lenders.
If your student plans on attending graduate school, you can take advantage of their years as undergraduates to start building up your credit score. Parents can apply for a federal PLUS loan for graduate students with minimal credit requirements. If you help your student son or daughter with their life expenses, textbooks, and supplies, do it with a credit card and pay your card on time. This way you can help them with their studies and, at the same time, increase your credit rating so you can help more in the future.
Another way to increase your credit rating is taking out a collateral loan and paying it back faithfully. You can mortgage a house or car, or apply for a home equity loan to help pay your student’s education costs.
With some work, student loans for parents with bad credit can be obtained, and barring student loans, there are other methods of helping your children get an education.