My credit score is 628 (not too good I know). However, is my credit score good enough to be approved for a student loan? I do not have a cosigner so that’s not an option.
Tags: credit, Enough, Good, Loan, Score, student
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January 23rd, 2010 at 1:19 pm
Rowan:
You’re over-simplifying the loan approval process – no lender will approve your loan application on the basis of a credit score.
To be approved for a student loan, you’ll need to satisfy the lender’s guidelines for income, assets, debt-to-income ratio and credit history. It’s just just about your score.
The score is certainly part of the process – it tells the lender if you’ve been a responsible borrower in the past.
The problem, of course, is that you don’t repay the loan with your credit score – you repay the loan with your income and your assets. If your credit score is 800, but you make $600 a month, you’re not going to be in any position to make a $400 monthly loan payment.
If you make $5000 a month, but you have $4300 a month of other monthly obligations, you’re not going to be able to make a $400 monthly loan payment.
To qualify for a student loan without a cosigner, you’re going to need a substantial income, you’re going to need, not just a positive credit history, but a well-established positive credit history, and you’re going to need “spendable” money – money that isn’t already committed to some other debt obligation.
If you have a 680 score, a great income, low debts and a well-established credit history, you may well be approved for a student loan. If you’re like most college students, and you have a part-time job, and a fledgling credit history based on some minor credit card debt and a few gas cards, it’s not highly likely that you’ll be approved without a cosigner.
If you’re looking for money for college, your primary focus should be on the government’s Stafford loan program, which will lend you $5500-$7500, depending on your year in school. If you’re over 24, or you’re married, you support children of your own, or you’re in graduate school, you will be eligible to borrow considerably more.
Good luck to you!
January 23rd, 2010 at 2:56 pm
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January 23rd, 2010 at 3:44 pm
No.