Best Private Student Loans for Bad Credit

By Abigail Eun
By Abigail Eun

Your credit score is like the report card of adulthood, except it’s one number based on your creditworthiness, as opposed to letter grades. 

As a college student, having a bad credit score isn’t optimal when it comes to securing a private student loan. However, don’t lose hope just yet. You still have a variety of options to choose from.

Check out this quick read to see the best private student loans for student borrowers with adverse credit history.

Can You Get Student Loans with Bad Credit? 

Yes, you can still receive student loans with bad credit. Bad credit doesn’t automatically disqualify you from receiving a student loan, though the eligibility criteria may vary between loan options.

Federal Student Loans

Federal student loans will be your best option if you have a bad credit store. Federal student loans are issued by the federal government and are extremely borrower-friendly. 

Federal student loans don’t assess your credit score in most cases and come with income-based repayment options, loan forgiveness, and deferment options.

In addition to having flexibility as a borrower, federal student loans also carry a flat interest rate that is typically lower than the interest rates offered by private student loans. This means that interest rates are the same amongst all student borrowers, regardless of credit score. 

In order to receive a federal student loan, make sure you meet the eligibility requirements and submit your FAFSA application. 

Private Student Loans

Receiving a private student loan can be more challenging, and you’ll need to be deliberate with your actions. 

  1. Find the best private student loan for yourself on the market. You should consider interest rates, repayment options, origination fees, and whether or not these loans are enough to pay for your tuition. Submitting formal applications to multiple private student lenders can damage your credit score temporarily (this is called a hard inquiry), and this is a risk you should not take. Instead, use Sparrow to see what loan options you can get with premier lenders without damaging your credit score. We help borrowers with bad credit find a loan that suits them without hurting their credit. 
  2. Consider getting a creditworthy cosigner. A cosigner is an individual, usually a family member or friend, who is responsible for the loan with you. If you can’t or do not repay the loan on-time or in-full, the cosigner is contractually obligated to do so. If you have a bad credit score, having a cosigner is useful because it reduces your risk profile as a borrower. This allows you to have a wide array of loan options with lower interest rates. Though there are loans that don’t require a cosigner, having a cosigner boosts your chances significantly in getting a private student loan. 
  3. Explore outcome-based private student lenders who evaluate metrics outside of your credit score. There are private student lenders who do not evaluate credit score, and instead look at your academic performance, major/school, and future income potential. Ascent, Edly, and Funding U are popular outcome-based lenders that are accommodating to students.  

What is Considered a Bad Credit Score? 

FICO and VantageScore are the two leading scoring models to measure credit, though FICO is the most widely used scoring model and used by 90% of lenders. 


FICO scores range from 300 to 850 and are measured by the following categories.

Source: FICO

Payment history (35%)

This is the most important factor of your FICO score. Your credit history is your record of payments in past credit accounts and assesses your punctuality in payments (or lack thereof).

Amounts owed (30%)

This is the second most important factor of your FICO score. If you have outstanding amounts of money to pay back (ex. You have a $1,000 credit line and you’ve used $900), this can indicate to lenders that you are overextended in your finances. 

Length of credit history (15%)

Though you don’t need a long credit history to have a high FICO Score, your credit history takes into account the following items:

  • When your credit accounts were created (your oldest account, your newest account, and the average age of all your accounts)
  • Usage of certain credit accounts
  • Longevity of specific credit accounts

Credit mix (10%)

There are two types of credit accounts: revolving accounts and installment accounts. 

Revolving accounts are credit accounts that have flexible repayment plans and options, like credit cards, HELOC (Home Equity Line of Credit), retail store accounts, and gas station cards. 

Installment accounts consist of mortgages, auto loans, and student loans. 

Having a varied credit mix improves your FICO score, as it shows that you don’t have a limited credit experience. However, this doesn’t mean that you should try to open different types of credit accounts. 

Your credit mix is largely dependent on your age, socioeconomic status, and other factors, so it won’t determine whether or not you obtain credit from lenders. 

First and foremost, your payment history is the most influential factor for your credit score, so focus on paying your dues on time. 

New credit (10%)

Opening multiple credit accounts in a short period of time is a red flag for lenders and can have negative effects on your credit score. Be sure to demonstrate reliability and creditworthiness with the credit lines you have open, instead of opening multiple accounts. 

FICO considers a credit score to be poor if it falls below 580, fair if it ranges between 580-669, and good if it falls between 670-739.

What Can I Do to Raise My Credit Score Before Getting a Student Loan? 

Though there is no magical quick fix to raise your credit score substantially in a short period of time, you can still raise your credit score by your next credit report with the following steps:

  1. Pay your bills on-time.
  2. Pay off any outstanding debt.
  3. Hold off on opening new lines of credit.
  4. Don’t close your current credit card accounts. 
  5. Check your credit report to assure that there is nothing incorrect or fraudulent. 

Best Private Student Loans for Bad Credit

As a student with bad credit, it’s easy to be overcome with fear and worry about being able to take out a student loan and afford tuition.

However, fear not! You still have options available. 

We’ve compiled several undergraduate and graduate student loan options that are borrower-friendly and have forgiving credit score requirements. To check your eligibility with each lender, complete the Sparrow application.

For Undergraduate Private Student Loans 

Funding U

Funding U is an online lender that focuses exclusively on undergraduate students with no cosigner. Rather than looking at your credit score or income, Funding U looks at non-traditional metrics such as your school, major, GPA and estimated future earnings to assess your creditworthiness. Funding U’s student loan is best if you are a high-achieving undergraduate student with limited credit history and no access to a creditworthy cosigner. 

For Undergraduate & Graduate Private Student Loans

Arkansas Student Loan Authority

The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA has a minimum credit score requirement of 670. ASLA is a great option for Arkansas students.

Ascent – Cosigned Loans & Non-Cosigned Loans

Ascent is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for those who do not have a cosigner available, are international or DACA students, or have lower credit scores. Ascent’s minimum credit requirement varies based on the loan.


Brazos is a non-profit lender offering educational funding through private student loans available only to Texas Residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. Brazos does not disclose their minimum credit requirement. Brazos is a great option if you live in Texas and want competitive interest rates.

College Ave Student Loans

College Ave Student Loans offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. To qualify for a student loan with College Ave, you will need a credit score in the mid-600s. College Ave is a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.


Earnest’s student loans provide funding to undergraduate, graduate, and professional students. Earnest has a minimum credit score requirement of 650. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.


Edly Income-Based Repayment (IBR) Student Loans, originated by Edly’s partner FinWise Bank, provide an alternative loan option for students. Students who are approved for an Edly student loan will not have to make payments while in school. Instead, borrowers make payments after graduation based on their income. Due to the structure of IBR loans, borrowers have a variety of benefits when it comes to repayment. An Edly IBR loan is best if you are seeking a loan option with no cosigner, competitive repayment terms, and flexible repayment options.


LendKey is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey has a minimum credit requirement of 660. It’s best for students who want generous cosigner release and forbearance policies.


MPOWER is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner. 

Prodigy Finance

Prodigy Finance is an online lender that provides funding to international students. They offer non-cosigned graduate student loans. They’re a good option for international students who don’t have a credit history and can’t access a qualified cosigner. 

Sallie Mae

Sallie Mae is an online lender that provides educational funding to students. They offer cosigned and non-cosigned undergraduate, graduate, and career training student loans. To qualify for a student loan with Sallie Mae, you must have a credit score in the mid-600s. They’re a good option for students seeking competitive interest rates with a creditworthy cosigner. 

Closing Thoughts from the Nest

Having a bad credit score as a student can be extremely disadvantageous. Raising your credit score should be an important priority if you plan to take out student loans, open new lines of credit, and more. 

However, there are still student loan options available to you, even if you have a bad credit score. 

Remember to research federal student loans and outcome-based, borrower-friendly student loans. When looking for private student loans, remember to be deliberate with your actions (think about the effects of hard inquiries on your credit score, consider getting a cosigner, and make an effort to raise your credit score).

On top of that, apply to college scholarships and grants to fill the gaps in college costs.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

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