Bad Credit Student Loans
Since the abolishment of student grants in 1998, students have needed to obtain loans in order to fund their education. Some 81% of students now take out student loans averaging £3190 per year - approximately £2000 more than students were having to take out on loans 10 years ago. Given that for the majority of students these loans are the first time they've had to handle money, many do get into bad credit situations by the time they graduate, racking up several thousand pounds of debt.
In 2006 the government is to introduce top-up fees into the education system. This could increase the risk of students getting into even more unmanageable debt, and may result in students acquiring a marred credit record. Obtaining a student loan is difficult enough without the problems that a bad credit history can cause. Banks and other loans providers normally want to see a good credit history before extending credit to an applicant. But, given that students are just starting out on the 'credit ladder' they generally do not have any substantial credit history to fall back on.
Taking out bad credit student loans
If you find yourself in the unfortunate situation of needing more money but are being denied further student loans because of a bad credit profile created by other student loans that you've held, then you should consider taking out bad credit student loans.
Bad credit student loans are designed for students who have developed a bad credit record. They are available through specialist providers of bad credit loans who tailor their acceptance criteria more closely to a student's personal circumstances. They can also help you out if you are a mature student with CCJs to your name, mortgage arrears, defaulted payments on other loans or even if you have filed for bankruptcy.
Bad credit student loans are often available at a higher APR than standard student loans. The total amount available may not be as high either, and you are likely to encounter restrictions on what the loan money can be used for. Additionally, you may find the repayment terms are more demanding than on a standard student loan. Providing you can live with these stipulations laid down by the provider then bad credit student loans are a good thing if you have a bad credit record. Such a student loan will not only help keep you solvent through your studies, but it will also go a long way to helping you repair your bad line of credit - providing you keep up the repayments!