Federal borrowing limits for college students will be reduced in the 2026-27 academic year, forcing more borrowers to turn to private student loans to bridge the gap.
Most applicants have a thin or nonexistent credit file, though, which can result in rejection or a high interest rate.
CNBC Select has chosen the best private student loans for applicants with bad or no credit, focusing on rates, eligibility requirements, terms, repayment options and other criteria. For more on how we made this list, see our methodology.
Best for flexible payment terms: Earnest
Who's this for? Earnest offers standard, interest-only and extended-term repayment plans, as well as a rate reduction program. Borrowers enjoy a nine-month grace period after graduation, which is three months longer than the industry average.
Standout benefits: Applicants with a FICO® Score of 650 or better can apply without a co-signer. Earnest will match qualified competitors' rates and give a $100 Amazon gift card when the rate match is finalized.
- Nine-month grace period available
- No co-signer required but offers the option to apply with a co-signer
- 0.25% interest rate discount for autopay
- Qualified borrowers can skip one payment every 12 months
- Offers student loan refinancing
- Offers loans for half-time students while still providing benefits received by full-time students (like the skip payment, autopay discount and more)
- No co-signer release option available
- Variable rates not available in all states
Actual rate will vary based on your financial profile. Fixed annual percentage rates (APR) range from 4.60% APR to 10.24% APR (4.35% - 9.99% with .25% auto pay discount). Variable annual percentage rates (APR) range from 6.13% APR to 10.24% APR (5.88% - 9.99% with .25% auto pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once a month, but there is no limit on the amount that the rate could increase at one time. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Our lowest rates are only available for our most credit qualified borrowers and require selection of our shortest term offered (5 years) and enrollment in our .25% auto pay discount from a checking or savings account. Enrolling in autopay is not required as a condition for approval.
Best for no co-signer: Funding U
Who's this for? Funding U uses criteria besides credit to approve applicants — including GPA, estimated graduation rate and employment experience — making it easier to be approved without a co-signer.
Standout benefits: Students who make interest-only payments while still enrolled are eligible for a 0.5% interest rate discount. Funding U will also send borrowers a $100 Amazon gift card upon graduation.
- Considers borrowers' earning potential
- Borrowers have hardship protections
- No co-signer required
- No fee for paying off loan early
- 0.5% interest rate discount for making interest-only payments in school
- Loan officer assigned to each borrower for hands-on help
- Promises an approval decision in just minutes
- Only fixed-rate loans
- Not available in every U.S. state
- Non-cosigned loans tend to charge higher interest rates
Best for applying with a co-signer: College Ave
Who's this for? College Ave approves co-signers with credit scores in the mid-600s, lower than many competitors require. Student loan borrowers can apply for cosigner release once half of the original repayment term has elapsed.
Standout benefits: Repayment options range from full principal and interest payments while enrolled to deferred until graduation. College Ave also offers multi-year approval to undergraduate student borrowers.
- High loan amount
- Flexible repayment terms
- Hardship protections like deferment and forbearance
- No co-signer required for U.S. students
- Offers repayment terms of up to 20 years for graduate student loans (otherwise, up to 15 years for undergraduate loans)
- Co-signer can't be released until half of the repayment term has passed
College Ave's student loan products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or BTG Pactual Bank, N.A., member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term
Best for a long grace period: Ascent
Who's this for? Some lenders offer a six-month grace period after graduation before payments are due, but Ascent® Funding* extends that pause to up to 36 months, depending on the program.
Standout benefits: Borrowers receive 1% cash back* on their principal loan amounts at graduation. If you're enrolled in an Outcomes-Based Loan® program, you can enjoy a rate reduction of up to 1.0% for setting up autopay*. For credit-based loans, the discount is 0.5%.
- Considers borrowers with no credit
- High loan limit
- Co-signer release available after just 12 payments
- Up to 1% interest rate discount for autopay*
- 1% cash back rewards*
- Considers alternative requirements like the borrower’s school, program, graduation date, major, GPA, cost of attendance and Satisfactory Academic Progress (SAP) to grant approval
- Maximum fixed APR is on the high side
- Doesn't offer student loan refinancing
Disclosure: *Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent's Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 3/1/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments. Loans subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions. The final amount approved depends on the borrower's credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1% Cash Back Graduation Reward subject to terms and conditions. For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers that agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
Exhaust all your options for federal student loans first. They typically have lower fixed rates, more repayment options and don't require a credit check. You'll need to complete a Free Application for Federal Student Aid (FAFSA) by June 30, though, to qualify for subsidized and unsubsidized loans, Pell Grants and work-study programs.
There are caps on federal loans, so also explore scholarships, grants and other assistance programs.
Can you get a student loan with bad credit?
While most student loan lenders prefer a credit score in the mid-600s, considered fair to good, it is possible to be approved with bad credit — or even no credit score at all. In most cases, you'll need a co-signer with good credit. Not all lenders allow for co-signers and some restrict how long they must remain on the loan, so be sure to check before you apply.
DACA (Deferred Action for Childhood Arrivals) students and non-U.S. citizens can also apply for a private student loan, as long as they get a co-signer who is a U.S. citizen and meets other eligibility requirements.
Lenders like Ascent Funding and Funding U specialize in students with weak or no credit and may approve borrowers without a co-signer. The tradeoff, however, is usually higher interest rates and less flexible repayment terms.
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
Undergraduate and graduate students, parents, health professionals
$5,000 minimum (or up to state); maximum up to cost of attendance
5, 7, 10, 15, years; up to 20 years for refinancing loans
Terms apply.
Undergraduate and graduate students, parents, international students with U.S. co-signer
$1,000 up to the cost of attendance ($180,000 lifelong maximum)
5, 8, 10, 15 years for undergraduate loans, up to 20 years for graduate loans
Terms apply
How to compare student loans
To compare loan offers, consider the following:
- Annual percentage rate (APR): The APR is the total yearly cost of the loan, expressed as a percentage. Because it includes both your interest rate and mandatory fees, it gives you a much clearer picture of what the loan actually costs than just the base interest rate. All else being equal, you want the loan with the lowest APR.
- Repayment terms: Longer repayment terms can mean smaller monthly payments, which may suit your budget better. But you'll pay more in interest over the life of the loan. Typically, you want the shortest loan term you can reasonably afford.
- Fees: Look for lenders with no origination fees, late fees or prepayment penalties.
- Co-signer release term: If you have a co-signer, they'll have to repay the loan if you default. Lenders will allow you to release your co-signer after a set period (or a specific number of payments). The quicker your co-signer can be released, the better.
- Deferment/forbearance: While less common, some private lenders have options to pause payments during financial hardship or in-school periods.
Private student loans pros and cons
- Can lend up to the full cost of attendance.
- Competitive rates if you have great credit
- Easier to refinance
- May require a co-signer
- Lack federal protections like income-driven repayment and flexible forbearance
- Variable rates
- Fewer options for deferment while in school
How to build your credit score
These should be your first moves when trying to raise your credit score:
Pay bills on time. Payment history represents 35% of your credit score, so making on-time full payments is the most important way to improve your score. Enrolling in autopay can help.
Limit your credit utilization. Your credit utilization rate is the proportion of your total credit limit that you're currently using. If your credit cards have a total limit of $20,000 and your balances total $5,000, your credit utilization rate is 25%. Experts recommend keeping it below 30%, though people with excellent credit tend to have rates of 10% or less.
Avoid opening new accounts. Lenders use a hard inquiry when you apply for a line of credit, which results in a temporary hit to your credit score. If you're trying to raise your score, avoid applying for multiple credit cards or installment loans in a short period.
Check for mistakes. Your score may have been impacted by identity theft or inaccurate items on your credit report. Even if your situation was caused by your actions, mistakes could be dragging your score down further.
Student loan FAQs
What's the difference between federal and private student loans?
Federal student loans don't require a credit check and offer fixed, lower interest rates, income-driven repayment plans and forgiveness options. Because they depend on your credit, have higher rates and stricter repayment terms, private student loans should be used after exhausting federal aid.
Can you refinance private student loans?
Private student loans can be refinanced to secure a lower interest rate on your balance. The terms for refinancing vary by lender. Multiple private student loans can be consolidated into one, but private loans can't be consolidated with federal student loans.
Can private student loans be forgiven?
Private student loans are not eligible for the same forgiveness programs as federal student loans. Most private lenders will only forgive or discharge a loan in the case of the borrower's death or full disability.
Can I get a private student loan with a 500 credit score?
It's difficult to get a private student loan with a 500 credit score, which is considered poor or very poor (subprime). Most student lenders want to see a FICO Score in the mid-600s. In most instances, you'll need to apply with a creditworthy co-signer.
What disqualifies you from a private student loan?
Not meeting a lender's basic eligibility criteria, like being at least 18 years and a U.S. citizen or permanent resident, can disqualify you. A history of delinquencies, defaults, bankruptcy or other financial black marks can also hurt your chances of being approved for a private student loan.
Depending on the loan, you may also be disqualified for not attending an accredited institution or for not being enrolled in enough credits. Lenders typically want at least a half-time schedule.
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice to help them make informed financial decisions. Every student loan list is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of student loan products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Our methodology
To determine the best student loans for borrowers with bad credit, CNBC Select reviewed more than 20 private lenders that don't require a credit score or that allow creditworthy co-signers.
To narrow our list, we focused on:
- Eligibility requirements
- Maximum and minimum loan amounts
- Interest rates (fixed or variable)
- Loan terms
- Repayment options
- Customer service and digital experience
- Borrower protections, including grace periods, deferment and forbearance
- Bonus features, like autopay discounts
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Read more
Disclosure: *Ascent Funding, LLC products are made available through Bank of Lake Mills or DR Bank, each Member FDIC. Subject to credit approval. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations, terms and conditions may apply for Ascent's Terms and Conditions please visit AscentFunding.com/Ts&Cs. Annual Percentage Rates (APRs) displayed above are effective as of 3/1/2026 and reflect an Automatic Payment Discount (ACH). The ACH discount consists of 0.25% on credit-based college student loans submitted prior to 6/1/2025, a 0.5% discount for on credit-based college student loans submitted on or after 6/1/2025 and a 1.00% discount on outcomes-based loans when you enroll in automatic payments.
Loans are subject to individual approval, restrictions and conditions apply. Loan features and information advertised are intended for college student loans and are subject to change at any time. For more information, see repayment examples or review the Ascent Student Loans Terms and Conditions.
The final amount approved depends on the borrower's credit history, verifiable cost of attendance as certified by an eligible school and is subject to credit approval and verification of application information. Lowest interest rates require full principal and interest (Immediate) payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the examples above, based on the amount of time you spend in school and any grace period you have before repayment begins. Variable rates may increase after consummation.1%
Cash Back Graduation Reward subject to terms and conditions.
For details on Ascent borrower benefits, visit AscentFunding.com/BorrowerBenefits. Ascent applicants and borrowers who agree to the AscentUP Terms of Service and Privacy Policy, as well as students associated with an Ascent parent loan application, have access to the AscentUP platform.
