Non Credit Based Student Loan
Introduction
Having bad credit records makes lenders think twice before giving students loans, Private and State loans become a distant dream for those who do not get good credit scores. However one should not lose hope and take risks. Students should be wise and not stupid and opt for the other facilities made available to them. Many people say it is risky to go in for non-credit based loans but progress always involves risk. However one must be sure of the next step which is to be taken, weigh all your options, and see all your possibilities before coming to a final decision. If you wish to finish your higher education and have no other choice then by all means get a loan, because nothing is more important than a degree. A degree secures a good job and is the foundation stone to a lucrative career.
Application
Many companies as well as colleges offer student loans. There are two types of student loans without a credit check, they are secured, and non secured. Student loans with no credit check will not only prevent high interest student loans, but you can also rise your FICO score if you determine yourself to pay your quotes in time. Its much easier with a secured non credit check student loan because your payments are low. A prompt and timely repayment always keeps you away from falling into a debt trap; hence all efforts should be made to pay them in proper time. Another reason to opt for non credit based student loans is that the lower your credit score is the higher the interest rate hence non credit institutions are a viable and better option.
In non credit based education loan, the most important factor is that when taking on an unsecured debt consolidation loan, one is classified at a potentially higher risk as there is no property to secure the loan against. There is a paradox that more the person is in debt, the more reluctant he or she is to ask for help, thus a student should find out information regarding the interest rate, the monthly installments, the repayment period, etc to ensure that you are comfortable with the loans offered to them.
It is easy to apply for such kinds of loans as there is a universal form by the Department of Education which has to be filled. In the U.S, there are two kinds of non credit personal loans; they are Federal Perkins Loans or Stafford loans. Federal loans have lower interest rates and favorable terms and conditions. Stafford loans are the most common and here the rates can be subsidized or unsubsidized.
Unsubsidized Staffords loan and Perkins loan can be obtained even if you do not have a good credit to back you up; these loans offer much lower rate of interest as compared to private or personal loans from other lending institutions. Another good option is to go for PLUS loans; where in a qualifying co-signer may still enable a parent to pay funds for their childs education. The current interest rate for Stafford is around 7.14% per annum and for PLUS is around 7.94% per annum. One should keep in mind that after completing their studies, they have a grace period to pay their loan wherein they can take up a job and return the loan. Education is in between poverty and prosperity and all efforts should be made in the direction of securing the best possible education.
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