It is possible to get bad credit student loans, but like any other loan to someone with a bad credit history they bring snags. Many students are worried about the costs of attending university and wonder if they will be saddled with a huge bill to repay over a long time, once they have finished their studies. For this reason many are tempted to take out other loans with shorter repayment periods to help see them through. However this is not always the best idea.
The usual route for students in the UK to get loans to see them through university is through the student loans scheme. From 2012 there will be two student loan types available. In general, providing they meet the criteria to qualify, they will get the, loan regardless of credit history.
There will be a loan for tuition fees, available to all students, and one for maintenance and living costs, available to full-time students only.Obviously these loans do not always provide enough money for many students. If the university they attend is in a popular area, housing costs may swallow the whole loan almost immediately.
This is where many students start to get into financial difficulties. Instead of making provision for themselves by working through the summer holidays before they start, or between terms once they have started, so they have some money extra to their loans, they start to look for other ways to finance themselves. To start with they generally take out credit cards and soon max them to the limit and start defaulting on payments.
Whilst this happens they have probably used all their student overdraft often gone over the limit. To start with the banks will be helpful, but will soon limit their available credit, if they do not keep the terms of any agreements made. They may be denied a check books and debit cards may be recalled or limited to use only when the account is inside agreed limits.
This is when students start looking for other forms of finance. They are available but at a cost. I found several websites when searching for companies that lend to students with bad credit histories. Without exception they were poorly written, and do not read as regular fluent English, which is the first thing which should set alarm bells ringing. The other thing with most of them was that they merely direct you to other websites.
The first websites say that there are no fees, but, as they only redirect you, why should you pay them? When you get to the proper lending website eventually, you?ll find out what happens if you miss payments and the true cost of the advance. It will normally be in small print somewhere and is not pleasant to read. Some lenders will charge as much 35% interest on a loan.
You can avoid this by developing good financial habits from the beginning. If you work whenever you can, you will be able to build up savings to help you. Another good thing to learn is how to manage your spending and how to budget. Doing this will ensure that you never need to look for bad credit student loans.
The writer is a qualified education professional who writes about getting financial aid.
Source: http://www.davidsonmachinery.net/a-prime-issue-with-student-loan-funding
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