My Parents have Bad Credit! | 06.25.10
One of the challenges of getting a private student loan is finding an adequate cosigner. Because many high school and college students lack the credit history to be viewed as a legitimate borrower by banks, you will almost definitely need a co-signer for a private student loan. For the vast majority of undergrads, the most likely cosigner will be a parent or guardian. But what happens if your parents have credit problems of their own?
When this is the case, you have two options. First, you could seek out another trusted adult, preferably a relative or close family friend. Basically, you want someone with a strong credit history, is financially secure and is trustworthy. (Read this checklist for finding a private student loan co-signer.)
Another option is to ask your parents to apply for the Parent PLUS loan. If they have bad credit, they will get denied. This is a blessing in disguise, as you, the student, will become eligible for up to $6,000 more per year with an unsubsidized Stafford loan. Do you have questions about borrowing a private student loan? Ask them in the forums!
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