Money Sense Tips

As some of us know, having bad credit can ruin our ability to obtain loans to buy a car or acquire any credit without paying exorbitant interest rates.  Applying for a student loan while having bad credit, particularly these days, is even tougher than before the recession.

Here are some tips that apply not only to student loans, but general credit as well:

* Check your credit report annually.  Ensure there are no questionable debts.

* Check your FICO score with the three agencies as well.  Today, you need a minimum FICO score of 720 in order to obtain a low-interest rate loan.

* Pay down as much debt as possible.  Use the “snowball” method.  Start with the highest interest rate credit card first.  Pay more than the minimum until it is paid off, then use that money to pay the next credit card and so on.

* Ask your boss if you can work overtime.  If not, apply for a second part-time job.

* Apply for a government loan such as a Stafford loan.  In lieu of this, speak to the financial aid counselor at the college or university your son or daughter will be attending to determine why type of financial aid you do qualify for.

In addition, if you are a student who needs financial assistance, ask your parents if they will co-sign a bank loan.  If they have great credit, there shouldn’t be a problem.

Although many banks today are not lending, there are many exceptions where they will authorize a loan for borrowers with bad credit based on a higher rate of interest.  Some lenders will even utilize student scores as criteria for approving a student loan.

Apply for all federal loans to ascertain what loans are approved under these conditions.  Check with Sallie Mae and the Perkins Loan as well.

In today’s economy, steps are being taken by the administration to make student loans more accessible.  Stay focused on the latest news regarding Federal loans by bookmarking the website of many of these government-initiated loans.

Learn more from StudentLoansMentor today.