Furthering your education can be hugely beneficial when it comes to growing in your career, and ultimately in your finances. Whether you’re enrolling in a degree program or a career training certificate program, though, one question you may have to ask yourself is how to pay for it. And, depending on your credit history, you may be wondering what payment options are possible. So, how to pay for school with bad credit? We’ve got some potential avenues you can take below!
Scholarships and grants
When figuring out how to pay for a program, the first step you’ll want to take is to look into scholarship and grant opportunities. Check your school’s website or talk to a representative to learn if there are any offered by the school. Or, you might even be able to find outside sources of funding — for example, one of these scholarships — that can go towards tuition or living expenses.
If, after exploring scholarships and grants, you still need assistance in making tuition payments, you might also want to check if your school offers payment plans. This way, you can make smaller payments over a period of time. You won’t have to worry about interest or a credit check, but they do span a shorter time frame — you’ll pay it off quicker and without interest, but you will have higher monthly payments.
Federal student loans
For those who need to make even smaller monthly payments, a student loan can be a good option. Some schools receive Title IV funding from the US Department of Education, which provides grant, work-study, and loan funds. And, except for Direct PLUS Loans, these loans do not require a credit check, so your credit score will not impact your eligibility for most federal loans (additional qualification requirements must be met for Direct PLUS Loan applicants with an adverse credit history).
Private student loans
Federal loans are not available for all education programs, though. If you’re enrolling in one of these programs (perhaps a coding bootcamp, cosmetology school, or any school who prefers not to use Title IV funding), you might next want to look into private student loans. Like federal loans, these financing options offer lower payments over a longer period of time, with an interest rate attached. However, unlike federal loans, qualification criteria vary from lender to lender. Many lenders require a credit check as part of their application process and use credit history in their underwriting. What can you do if you’re applying for one of these loans? Not having strong credit isn’t the end of the line, and there are a couple steps you can take:
Add a co-borrower
A co-borrower is someone who may meet the criteria to qualify if the borrower does not, and who agrees to take responsibility for the loan should the borrower become unable to make payments. Many lenders (including Climb) allow applicants to have a co-borrower on their loan — this way, a borrower has a chance to be able to qualify for the loan or even receive a lower interest rate as long as the co-borrower meets all the qualifications.
Strengthen your credit
If you have some time before your application, you can also take some steps to strengthen your credit score. Check your report to check for any inaccuracies, pay all bills on time, and stay below your credit limit. You can also pay a credit repair company to check your report, liaise with credit bureaus, and remove any inaccurate negative items. If you don’t want to use a credit repair company, or if there are negative items on your report that they can’t remove, there are still some steps you can take to remove them yourself:
- Submit a dispute to the credit bureau
- Submit a dispute to the business that reported to the credit bureau
- Send a pay for delete offer to the credit bureau
- Request a goodwill deletion
- Wait for the time limit to expire
Deciding how to pay for school with bad credit
You’ll want to explore all options to determine which is the best one for you — and be sure to stay in contact with your school admins, who can be a great resource. Ultimately, which is right for you will depend on what’s available for your program, and what fits your financial situation and goals. Want to see what payment options are available through Climb? Click the link below!