Guide to No-Credit-Check Student Loans

You’ve maximized your grant and scholarship options, but still don’t have enough funds to cover tuition costs, you might need to turn to student loans. Generally, when you take out a loan, you must prove that you’re a creditworthy borrower to get approved.

According to the Consumer Financial Protection Bureau (CFPB), more than 80% of 18 or 19 year olds are what’s referred to as “credit invisible” and don’t have any credit score on record.

The good news is that many federal student loans fit the bill for college students without credit. Read on to learn about all of your student loan options with no credit check.

Federal student loan options with no credit check

If you’re looking for no-credit-check student loans, most federal loans don’t require credit checks at all.

Federal loans are backed by the federal government through the U.S. Department of Education. This means they have different requirements than a private lender and can shoulder the risk of not checking your credit.

The student loan options with no credit check include:

• Subsidized Direct Loans. Undergraduate students might be eligible for this type of student loan if they illustrate financial need. The best part? The interest on your loans is covered — or subsidized — while you’re in school, during your six-month grace period, plus any periods of deferment.
• Unsubsidized Direct Loans. Undergraduate students, graduate students, plus professional students might qualify for this type of student loan. It doesn’t have financial need criteria; however, it also doesn't pay for any interest that accrues the moment your loan funds are disbursed.

Although having access to these no-credit-check student loans is advantageous, the downside is that these options have limits. For example, you can only borrow up to $20,500 per year in unsubsidized Direct Loans and even less for subsidized Direct Loans, depending on your year in school.

If you need to cover more of your educational costs, there are Grad PLUS Loans geared toward graduate students and Parent PLUS Loans for parents of undergraduate students. This type of loan lets you take out additional funds to cover educational costs. However, PLUS loans do require a credit check.

How to get no credit check student loans

As noted above, there are two standard no-credit-check student loans —  subsidized and unsubsidized Direct Loans, also known as Stafford Loans. It’s best to take on federal loans first, precisely since they don’t involve a credit check. They also offer amazing protections for borrowers.

These protections include deferment, forbearance, income-driven repayment plan repayment options and student loan forgiveness. To get started, here’s how to get student loans without any credit.

Submit the Free Application for Federal Student Aid (FAFSA®)

To obtain federal financial aid, you need to submit the Free Application for Federal Student Aid (FAFSA). Make sure to check the FAFSA deadline, as it can vary based on your state and school.

First, create a Federal Student Aid (FSA) account and get an FSA ID. This lets you manage the financial aid process online and even sign your documents electronically. Then, collect your personal information and documentation to assist you with the application process. These items may include:

• Driver’s license.
• Your Social Security number (SSN) or your parent’s SSN.
• Tax returns.
• Financial information about assets.
• Alien Registration number, if applicable.

You can use this FAFSA web worksheet to get started.

Review eligibility

After applying for FAFSA, you’ll get a Student Aid Report (SAR) which outlines the data you submitted. After that, you’ll get an award letter outlining your federal financial aid.

How much you get from the FAFSA depends on your school’s cost of attendance (COA) as well as your Expected Family Contribution (EFC). In fact, your financial need is determined by COA minus the EFC.

You might qualify for grants, federal work-study (such as having a job on-campus), or subsidized Direct Loans which don’t require a credit check. Additionally, you might qualify for unsubsidized Direct Loans which aren’t need-based. These financial aid and loan options don’t require a credit check so don’t worry whether you’re “credit invisible” or have a bad credit score.

Know the limits

Taking out a federal subsidized and/or an unsubsidized Direct Loan is a great start. But borrowing limits for these loans might leave you with a financing gap, based on the year you’re in at your school.

For example, $20,500 per year is the cap on unsubsidized Direct Loans for graduate students. In that case, you might need to cover the gap. If attending graduate school, you could take advantage of a Grad PLUS Loan, but it requires a credit check for borrowers.

If you have poor credit or no established credit history, you might consider private loans. There are some private lenders that can bridge the gap between your financial aid and education costs with flexible credit requirements.

Private student loans with no credit check

Private student loans can help you pay for the cost of school, but they generally require a credit check to determine your creditworthiness and interest rate.

If you’re looking for no-credit-check student loans, there are a couple of private lenders that don’t use credit as their primary factor when determining approval.

Funding U

Undergraduate students looking for no-credit-check student loans are in luck, thanks to Funding U student loans. Funding U is a unique lender in that they believe you’re “more than your credit score.” It uses your academic records and career aspirations as part of the process.

Eligibility requirements:

• Be over 18.
• U.S. citizen, permanent resident, or DACA recipient.
• Only for undergraduate students.
• Must be a full-time student (not half-time).
• Meet minimum GPA requirements.
• Getting a bachelor’s degree at a qualifying college.

Funding U doesn’t use the traditional FICO score, but does assess any negative marks on your credit history such as missed payments. It offers loan amounts from $2,000 to $20,000 each year for undergraduate students.

Ascent

Private loans tend to require a cosigner or good credit. Ascent offers credit-based student loans and loans with cosigners. But it also has an option without a cosigner too.

If you’re currently a junior or senior, you could qualify for student loans that are based on outcomes rather than just your credit score or having a cosigner. Loan amounts of $2,001* to $20,000 are available to eligible students.

Eligibility requirements:

• Must be a college junior or senior.
• U.S. citizen, permanent resident or DACA.
• Maintain a GPA of 2.9 or higher.
• 18 years or older.

If you don’t have established credit, or you fall short with your income but have credit history, you could get student loans based on your program, GPA, cost of attendance and your school.

*The minimum amount is $2,001 except for the state of Massachusetts. Minimum loan amount for borrowers with a Massachusetts permanent address is $6,001.

Alternative options

In addition to the two lenders listed above, see if your state offers student loan programs that might not check your credit.

For example, the Minnesota SELF loan states that interest rates are the same for all borrowers and aren’t based on an applicant’s credit. On the other hand, its fact sheet states that you must have a cosigner to make sure your rates stay low. So check with your state to see if there are no-credit-check student loan options for residents.

Additionally, there are programs such as Health Resources & Services Administration (HRSA) that provide profession-based student loans, such as nursing student loans. It’s important to note though that these programs must be managed by the school, and unfortunately, individuals can’t apply directly.

Get help paying for college

If you’re looking to pay for college, it can feel like an insurmountable task to figure out financial aid and student loans. If you don’t have any credit history or don’t have a good credit score, there are no-credit-check student loans available through the federal government.

If you need help figuring out how to pay for college, get in touch with Student Loan Planner for a pre-debt consultation. Our experts create a tailored approach for your unique situation.