Student Loan?

Question

How long would it take for a young person to build good enough credit to get a student loan without a co-signer? Also, what are good ways to go about building this credit?

Answer 1

Two of the major Federal loan programs (Stafford and Perkins) require no credit check (in fact, your financial aid office is forbidden from checking your credit as a condition for offering you this aid). As such, credit won't be an issue when you apply for Federal financial aid (www.fafsa.ed.gov) as an undergraduate. Now, if you need to supplement your federal aid package with private loans, you will need to build credit.

Private loan credit criteria varies greatly by company. The comanies that offer the best rates and terms will generally be the companies with the strictest credit criteria (or who require a co-signer). MEFA (mefa.org) is a good example of this -- their rates are incredible but, without exception, they require all undegrads to have a cosigner. There are, however, plenty of companies out there that cater to students with brief credit histories or bad credit. Some companies will actually treat "no credit" as "good credit" so, in your particular case, you might be better off with a brief history than with a negative history.

I have seen jobless Freshmen with 1-year credit histories be approved for large private educational loans (without co-signers)... Of course, their interest rates are FAR less-than-ideal, so if you can afford to wait until you build up some credit.

There are number of ways to build credit.

(1) You can apply for a "store" credit card (like Macy's or Best Buy) with a small borrowing limit. Then, make occasional purchases on the card, making SURE that you always pay them off on-time (on-time payments are by far the biggest factor in maintaining good credit). Now, store credit cards tend to carry higher rates, so avoid carrying a balance these cards. As with any card, keep a close eye on your interest rate -- the "fine print" on most card agreements enables the lending institition to raise your rate basically when they feel like it. So, if you get a card at 15%, they can easily raise your rate to 29% if, for example, you miss a payment.

(2) If your parents have good credit, they can add you to one of their credit card accounts. They don't even have to let you use (or see!) this card -- as long as your name is on their account, it will appear on your credit report and when they pay on-time, you will reap the benefits. (There is an obvious downside to this: if your parents develop poor payment habits, your credit will be negatively affected.)

(3) BankRate.com offers advice on this very matter. Their suggestion focuses on Secured Credit Cards, which are essentially a card that you pay a deposit on. This deposit essentially becomes your credit limit while at the same time making the credit card much less risky for the holder (though it is still reported like a regular credit card). For more information, see http://www.bankrate.com/brm/news/credit-management/secured-credit-cards.asp or http://www.bankrate.com/brm/news/DrDon/20060414a1.asp?prodtype=cc . Do make sure you've read the Federal Trade Commission's warning on some of the scams related to secured credit cards: http://www.ftc.gov/bcp/conline/pubs/credit/secured.htm ). That said, the following secured card seems legit: http://www.usa.visa.com/personal/cards/credit/visa_secured.html?it=c|/personal/cards/index%2Ehtml|Visa%20Secured

Answer 2

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Answer 3

There are tons of scholarships that go unclaimed each year. Many $400, $500 or $1000 scholarships never even get applied for because people think it's chump change and not worth applying for. Well, get a few of those $500 scholarships and it'll really make a dent in your tuition bill.

Do a search on scholarships, search your major, your ethnic heritage, your town, your parents employers, your employer, hobbies, high school, local chamber of commerce/rotary/ lion's club etc. Left-handed? There is a scholarship out there for you! Older woman returning to school? There are scholarships out there for you. Do combined searches on more than one criteria "hispanic women aviation scholarships" etc.

Go to the library and ask the reference librarian for a reference book on scholarships. They usually have more than one. There are all kinds of scholarships out there, you just have to start applying yourself and make it your summer career to send out letters everyday for scholarships. Good luck!

Answer 4

confident it particularly is and in case you haven't any longer already be responsive to, the ameliorations between pupil loan and pupil help is that pupil loan you will desire to PAY back!, in case you won't be able to the previous due expenditures will rises so becareful with how lots funds you going to borrow.

Answer 5

If you are in college you just need to fillout a fafsa. You can get free money (grants) that way and loans if you want. Search fafsa on google.