student loan advice | Can I get a graduate student loan if I have a home foreclosure on my credit report?

Can I get a graduate student loan if I have a home foreclosure on my credit report?

graduate Student Loans

Question: I know that you can get federal student subsidized loans and nonsubsidized loans if you have bad credit, but these non-credit based loans only goes up to $20,000. The school I want to go to cost around $70K. Are there any other types of loans out there available to graduate students that have bad credit? My FICO score now is 430 because I have a home foreclosure on my credit report.

Answer:Yes, but it won’t be easy. Let me explain. As with any financial loan, the better your credit, the easier it is to get a loan. I know, I know, big surprise hunh?

The traditional loans through non subsidized programs will not be possible with such a low credit score. The lenders will still look at your credit and a score of 445 will not qualify. If it was low because of lack of credit, then it would be different, but since you have other negative issues on your credit, they would consider you too high of a risk.

But all is not lost if you don’t have perfect credit. Just as it’s possible to get a credit card if you have bad credit, it’s also possible to get a graduate student loan if you have bad credit. Here’s a few of your options for obtaining such a loan.

Cosigner. You will need someone with good to excellent credit to cosign for you a graduate student loan. This loan may be a private student loan or one of the many graduate student loan offers out there now. With the economy the way it is, even this may be a tough route to go. It’s also true that not just anyone wants to be on the hook for 70k! Most of the time, the cosigner will be a family member but it doesn’t necessarily have to be. Perhaps you have a friend who could cosign for you? Whoever it is, make darn sure you pay it back. More than one friendship or relationship with a family member has been ruined because someone went default on a student loan and the cosigner was on the hook for the loan.

Repair your credit. Even if you have a home foreclosure on your credit, you can still repair it enough to be able to sign for a student loan yourself. It may take a while and you may have to put off some of your College studies for a year or so, but if you have one bad spot on your credit report and 10 good to excellent items, you just may qualify for that graduate student loan without having to worry about a cosigner.

Private Student Loans: A private student loan, often referred to as an “alternative loan” will lend up to $45k annually as long as credit and debt to income stipulations are met. Each loan is unique in its own way, but the general credit criteria needed is in the mid 600s. If you are not “hard denied”, meaning that you will not be able to get the loan even with the help of a cosigner, you may be able to get the funds required.

For graduate school you should also be looking at the GRAD PLUS loan, but you are right about them falling well short of the 60k you need for school.

Grants and Scholarships. You should consider applying for as many grants or scholarships as possible to make up the rest of your tuition. You’d be surprised at how many grants and scholarships go unused each year because there are not enough applicants. Pay a visit to your school’s counselor or check online. Just make sure you never, ever pay someone online to find you a scholarship. The info is readily available to anyone willing to put some time into the research. And if you’re a graduate student, you should know all about research!

Related Posts

Filed Under Student Loan FAQ's | Leave a Comment

Tagged With , , , , , , , , , ,

Comments

Comments are closed.