Bad Credit Student Loans

Having a poor credit history is never a good thing.But there is some luck out there because there is a small number of loan packages that never even once take a look at the credit status whatsoever.Some Federal loans only consider need or other factors and completely overlook the credit history entirely, good or bad.

Pell grants come to mind and they have been around for a long while. The disbursing of the Pell grant is based mostly on the economic state of the grantee.Pell grants for the low income family are pretty much automatic. Well almost. You can't just say that your family is low income, you have to proove it with documentation.

Those in charge of disbursing Pell Grants use a number, called EFC (Expected Family Contribution), to decide whether to give the money. Other factors also come into play (such as the cost of tuition and more), providing a well rounded picture.

The grant is a gift, not a loan and is currently a maximum of $4,050 per year. That may seem like a substantial sum, and it certainly helps a great deal. But with annual tuition upwards of $5,000-$10,000 or more it doesn't cover everything.You may find yourself needing more help.

That is why most students, therefore, will want to seek a loan in addition to a Pell Grant to help fund their education. There are many that are similarly need-based. One of the most common are Stafford Loans, which come in two types.

The first type of Stafford Loan, and the most desirable, is called 'subsidized'. The term comes from the fact that the government pays any interest that accrues during the period the loan is not being repaid. That period is typically while the student is carrying a half-time or greater load of classes, and for the first six months after leaving school.

The second type is 'unsubsidized' in which the student is responsible for any interest on the outstanding principle. If paid in installments while attending classes, it may be modest. A $4,000 loan paid over 120 months carries a monthly payment of $42.43 at a 5% interest rate. The interest portion is roughly $9 per month.Not much at all. If it accrues unpaid over several years, though, it can add a substantial amount to the total repayment after graduation. Any unpaid amount gets added to the prinicple, with the interest rate applied to the total.

The advantage to the borrower, however, of the second type is that they are almost always available to any student. In most cases, they won't cover more than about 25%-40% of the total costs, so students will need to supplement the loan with other sources of funds.

A detailed breakdown is available at: Student Aid and Salliemae Fees apply (up to 4%) to fund the loan, so students will actually receive less than the stated amounts.