How to get student loans when you don’t have a credit history

Even if you saved money and won scholarships, you may need to borrow student loans to pay for your education. But without a credit history, you will likely have to prioritize student loans without a credit check.

Fortunately, there are college loans for students with no credit history. Here’s what you need to know:

Apply for a private student loan and lock in your rate before rates go up.


Getting Federal Student Loans No Credit

There is no credit check when you apply for federal undergraduate student loans. Instead, what you borrow is based on your financial needs and/or how much it cost to attend your school.

The Free Federal Student Aid App (FAFSA) gives you access to Federal Student Loans. You provide information on how much you earn and what you have saved. Your parents’ income and assets are also taken into account. Other considerations, such as whether you have a scholarship offer, are also taken into account.

Once you have completed the FAFSA, the information is sent to the schools of your choice. They set up a package of financial aids, which may include scholarships as well as subsidized or unsubsidized student loans.

In order to continue to enjoy Federal Student Loans without a credit check, you must complete the FAFSA annually. Otherwise, you will only get enough money in the form of loans for just one year of schooling.

Completing the FAFSA each year allows your school to reassess your ability to pay for college. If you have siblings attending college, or if your family’s financial situation has changed, you may be offered further financial assistance next year. Either way, you won’t need to go through a credit check to qualify.

Note that while undergraduate student loans do not factor in credit, PLUS loans for graduate students and parents do. PLUS loans do not require you to have good credit; they just ask that you don’t have “bad credit”. If you do, however, you can try applying with an endorser.

Getting Private University Loans For Students With No Credit History

Unfortunately, there are situations where federal assistance is simply not enough to pay for your college-related expenses. If you’ve reached the borrowing limit for federal student loans, you may need to turn to private student loans.

Private lenders are pickier about your credit situation. Since private lenders have underwriting requirements, it can be difficult to get college loans as a student without a credit history. So how do you get student loans without credit when private lenders care so much?

The answer: a co-signer. If you don’t have a credit history, a co-signer with good credit can save the day. Note that the co-signer becomes just as responsible for the loan as you are.

In addition, private loans may carry higher interest rates than federal loans. They also usually don’t have flexible repayment terms like federal loans do. Make sure you fully understand the terms of your private loan before you or your co-signer sign on the dotted line.

Find a co-signer

A co-signer is a way to close your college funding gap without having a credit history. Most students enroll a parent. Family and friends are more likely to co-sign for you because they know you and your goals.

Like you find a co-signer, indicate your ability to repay the loan later. Base your claims on the fact that you have fulfilled other obligations in the past. Showing that you are responsible and ready to pay off the debt can go a long way in finding a co-signer.

Even if the co-signers take responsibility for the loan, they might be willing to take the risk to help you. Agree to remove their name from the loan or refinance your student loans when you finish school and have a job.

Work on building your credit throughout college so you have the capacity to meet your obligations without help. That way your co-signer knows they won’t always be hooked.

Use a revenue-sharing agreement

Rather than trying to get student loans without credit, it is possible to turn to a revenue-sharing agreement. Some schools are testing these arrangements in which students pledge a percentage of their future income to investors willing to pay for their studies.

It’s not exactly a loan, however. You promise that a percentage of your income will go to a benefactor for a certain number of years. Under the terms of the revenue sharing agreement, you could end up paying less than if you borrowed the money otherwise, thanks to the interest saved over several years – especially if your alternative is a private student loan with an interest rate higher.

Finding ways to pay for college

Ultimately, paying for college is all about pooling your resources. If you have the time you can save money by using something like a 529 plan to reduce your student loan needs. You can also work part-time during school or apply to be a resident advisor in exchange for free housing.

Student loans are only part of the puzzle when it comes to paying for your higher education. They are an important part, but they are not the only part.

Go over your options and get creative. If you can avoid getting student loans or reduce what you borrow, your credit becomes less important and you can avoid some of the interest charges that come with loans.

A great way to reduce the number of student loans you need to borrow is to apply for grants and scholarships.

Rebecca Safier contributed to this report.

Author: Krystel Shaylee Hudson

Krystel is a PaydayPot personal finance writer. She is a freelance personal finance writer located in Dallas. She is interested in writing about all kinds of personal finance issues such as mortgages, debt or student loans, auto financing, and personal loans. In the past, Krystel worked in search engine optimization (SEO) and affiliate marketing for a major home improvement business. When she's not working on her computer, Krystel can be found working as a volunteer or trying out new coffee places.