Alternative student loans
The normal reason that people begin to look for alternative student loans is bad credit. Either the student or their parents, or sometimes both, have such poor credit that no one will lend to them.
Student loans with bad credit can be very hard to find, you could look for private student loans and look for education finance partners who are willing to work with someone with bad credit.
If your family are going through financially tough times you should be looking for grants before you consider loans. Speak to the college that you have been accepted to and ask them for lists of any grants that are available.
Students will sometimes have to do some work to get the grant and some of them will be small but every little helps. Some local groups have funds available for students in need, local chambers of commerce are one place that it is worth contacting. Remember to try the ones in your home town as well as in the town where the college is.
Many of the well known loan providers do have programs for people who do not qualify for the normal federal loans. Whether you look at chase alternative student loans, wachovia student loans, astrive student loans or citibank student loans you will almost certainly end up paying more than if you were able to get a traditional loan.
If you know that your credit score is going to prevent you getting a traditional loan then you should start looking at not just grants but ways to improve your credit score. Get a copy of your credit score so you can see if there are any errors or misunderstandings that you could easily fix. Just removing errors will improve your credit score, it may move it enough for you to be eligible for a normal rate student loan.
Alternative student loans should be a last resort as they can often carry a much higher interest rate than a normal loan and that will cost a lot of money over the years of the loan. Before you sign any paperwork you should speak to someone independent who will tell you their honest opinion.
Once you have signed the loan documents and accepted the money you are tied into paying that money back so do not sign for amounts that you know you won’t ever be able to pay back. Companies who issue private loans do not have the forbearance and forgiveness that you could expect from a federal loan.