I have marginal credit (610) and am looking to borrow money for grad school. What are my options?

Answer 1

In the U.S, there are government-funded and private loans. Typically, one tries to cover most costs with the government loans as they are low-interest and require less of a credit check. There are direct unsubsidized and subsidized loans, one of which collects interest and the other does not. The max you can take out on these is $18,500 with a max of $8500 on the subsidized loan and $10K on the unsubsidized. These loans require no credit check and simply require that you fill out the FAFSA (Federal Application For Student Financial Aid). To make up the difference a new loan called the Graduate Plus loan was introduced this year and it requires that you fill out a seperate application and does require a credit check, although not very intensive.(I got approved, and my credit is not that great). You can borrow the difference between the $18,500 and your school's cost of attendance(living expenses and books included) as determined by your school's financial aid office. The application can be picked up at your school. Any additional monies can be acquired through private lenders such as the Sallie Mae program. Hope this helps!

Answer 2

Take some scissors and cut up all your credit cards, use debit instead. I assume the reason you have bad credit is you have a habit of accruing credit card debt. If you have bad credit, credit card companies can and will charge obscene interest rates, rob you blind with fees, and send you to an early grave, and they have the law on their side.

Only use credit cards, if you are absolutely sure you can pay them back within 24 hours, and NEVER, I repeat, NEVER use them for "emergencies." If you need money that badly, get a long term fixed rate loan. Credit card debt is not worth it.

Before you go into any more debt, talk to an independent financial counselor. They can help you find strategies for spending and borrowing money more responsibly.

Most financial institutions are happy to offer fixed low rate college loans, even to those with poor credit. Just be sure you do a lot of shopping around, and make sure you understand ALL the fine print, so you don't get stabbed in the back if you miss a payment or two. Federal student aid loans are also a very good idea, if you fit the criteria, and if the ceiling of about 10k is not a problem. Your school will be glad to help you with the required paperwork.

I believe it was Albert Einstein who once said; "the three most powerful forces on the earth are Gravity, Compound Interest, and Human Stupidity."

Answer 3

JustPeachy is right. Pay for as much as you can with student loans. You may also qualify for federal work study and Perkins loans, if you will be going to school full-time and will have little or no other income. Perkins loans are borrowed directly from the university that you are attending. You can only borrow $2000 per year, but it helps. Work study is about $3000 per year. You generally end up with some minimum wage job on campus, but again, its a bit more money. Try to get something related to your field or a job somewhere like the library where you will be able to study when you're not helping someone. Find out about other funding options. My department had very little funding available, but I was able to get a few small scholarships from the school of graduate studies. My school also had some grant money available to people living in campus housing. (they had apartments as well as dorms, so I wasn't stuck in a dorm with all the 18 yr olds...) Again, every little bit helps.

Otherwise, minimize your expenses while you're in school so that you don't borrow more than you absolutely have to. Once you've graduated and have a job, consolidate your loans. I graduated with about $40,000 in debt. My payments would have been about $400 per month. I consolidated and am now paying about $280. Of course, the term is now 25 yrs instead of 10, but I can make extra payments as my income goes up. Good Luck!