Student Loan With Bad Credit

The rules book of all major banks and financial institutions say that the students who need loan for study purposes should have a good credit history/credit score. However, if you do not come into that category, its not always the end of the line for you.

If you do not have good credit score or any credit history, you can also avail loan provided you bring in either your family member(s) or friend(s) with good credit history as co-signor(s). The co-signor(s) may be released if the main loan and interest are serviced properly and promptly for two years.

Once the loan is sanctioned, the next stage is disbursal. Disbursal is again divided into two parts – the tuition/exams fees/books etc., are directly paid to the institute/university/book vendors on their raising a demand on you. The second part relates to your living/maintenance expenses. If you are a hosteller, your hostel fees are paid directly and your sundry expenses are given by way of reimbursements. If you are a day scholar or you live on your own, you may get reimbursements on providing proof of payment. These are part of the disbursal of loan.

These disbursals are governed by the following terms and conditions.

1. The first is that you should show consistent good progress in your studies and pass all crucial exams and have no arrears or backlog of exam papers to clear. Disbursements may be stopped and loan recalled if you fail in one of your exams.

2. Though it is not mandatory, banks and FIs always encourage servicing the interest through family – parental/spouse’s earnings or through the income you get from a part-time job.

3. The loan, together with interest (if not serviced before) has to be repaid in easy monthly installments after the course is completed. Usually you get a moratorium period of six months after the course completion to enable you to get a good job and settle comfortably to repay the loan.

If you are interested in knowing about what must be done to get a student loan and where to get it, visit Student Loan and to know about other types of loans that can be considered, especially mortgage loans, visit Mortgage Loan.