How to qualify for student loans
Updated on March 19, 2020
If you’re considering going to college, there’s a good chance that you’re considering a student loan. If you don’t have a solid credit history or a cosigner, getting a loan can be quite challenging. However, acquiring a student loan is not an impossible feat. Here’s what lenders typically consider before allowing someone to take out a student loan:
Lenders will consider your income
As you would expect, the amount of money that you’re earning per year has a substantial influence on whether or not you’ll be able to get a student loan. However, your debt (or lack of it) is just as important.
The amount of debt you have is important
If you have a large amount of debt, it could cause lenders to take pause. Not only does this include credit card debt and other loans, but it also includes student loans from other times that you attended college.
Your debt to income ratio is considered
While the amount of debt that you have is important, your debt to income ratio is likely to have a larger impact on whether or not you qualify for a student loan. If your total debt is less than 20% of your annual income, you’re likely to be seen as being in good standing according to most lenders.
Your credit history
In order to qualify for a student loan, you’ll need to be able to show that you have a good credit history. One of the most important factors in this is your credit score. If your score is around 670, you’ll qualify for most private student loans. If your credit score is significantly higher than this, you might be able to get a lower interest rate.
Whether or not you have previously defaulted on a loan
Your credit history stays on your record for seven years. So, if you have defaulted on a loan within seven years of the present, it could make it harder to get a student loan.
You can qualify for a student loan
While you’ll need to use good money management skills to qualify for a student loan, it is certainly an attainable goal. Attending college will be within reach after you’re able to meet the criteria of lenders.