Student loans 7 February 2023

Best No Credit Check Student Loans of this Year

Students with no credit have the option of applying for federal loans that do not require a credit check at all. Private loans generally do carry out a credit check but some do not require a minimum credit score for approval. We have provided a list of the best loans to consider with no credit requirement.

Student loans with no credit check

Getting a private student loan without a credit score is possible, but they come with high interest rates and the choices are highly limited.

Federal loans are the best and only no credit check student loans and have lower interest rates. They are loans provided by the government and they offer various benefits to their student borrowers like income-driven repayment plans and loan forgiveness options. Therefore, they should always be a student’s first loan option. However, federal loans have a maximum borrowing limit and they may not be able to cover the full cost of attendance. In such a case, students may have to turn to private loans to fill the gap in funding.

Most private loans carry out credit checks and require at least a FICO credit score of 690 for approval. Students with no credit can either apply for these with a credit-worthy cosigner. There are some private options for student loans that do not have a minimum credit requirement but they usually come with higher interest rates.

Best No Credit Check Student Loans

Federal loans are the only student loans with no credit check. To see which type of federal loans you are eligible for, you will need to complete and submit the Free Application for Federal Student Aid (FAFSA) which requires some personal and financial information about the applicant and their family.

There are three main types of federal loans for students with no credit. Two of them, including Direct Subsidized and Direct Unsubsidized loans, do not carry out a credit check and have no minimum credit requirement. The Grad PLUS loan for students also does not require a minimum credit for approval; however, it may conduct a credit check to see if there has been any adverse credit history like bankruptcy in the 3 months prior to the application.

1. Direct Subsidized Loan

This loan is directed towards undergraduate students with financial need. It offers a fixed APR rate of 5.50% which does not change with time and the government pays the interest for students during their course of study and the 6-month grace period after that. The repayments start after 6 months of graduation and students have up to 25 years to repay the debt.

2. Direct Unsubsidized Loans

Direct Unsubsidized loans also have a fixed rate of 5.50% and come with all the benefits that federal loans come with like flexible repayment plans and forgiveness options. It offers students up to 25 years of repayment terms and is accessible to undergraduate, graduate, and professional degree students. However, unlike the subsidized loan, the interest on the loan accrues while the student is in school and also during the grace period and the student is responsible for paying all of it.

3. Grad PLUS loan

Grad PLUS loan is specifically for graduate students. It has the same repayment term length as other federal student loans of up to 25 years. The interest on this loan is slightly higher, which is 8.05% at present. Grad PLUS loan also does not require a minimum credit score for approval. However, if the applicant has had an adverse credit history, like bankruptcy, in the past few months then they may be required to apply with an endorser.

Private Student Loans For Students with No Credit

With no credit, you can either apply for private student loans with a cosigner or choose one of the following private student loans that do not require a minimum credit score for approval. However, keep in mind that all private loans, including the ones below, carry out a credit check.

The following loans can be applied for independently regardless of your credit situation.

LenderScholarooRatingFixed rates starting (APR)Variable rates starting (APR)

Funding U

Best for high achieving students with no cosigners

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4.4/56.99%N/A

M Power

Best for international students

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4.5/512.74%N/A

Edly

Best for income-based repayment loans

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4.3/56.97%N/A

Ascent

Best for students with a 3.0+ GPA

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4.8/512.71%12.96%

A.M. Money

Best for borrowers with no credit score

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5/57.95%N/A
Lender

Funding U

Best for high achieving students with no cosigners

ScholarooRating
4.4/5
Fixed rates starting (APR)
6.99%
Variable rates starting (APR)
N/A
Visit website
Lender

M Power

Best for international students

ScholarooRating
4.5/5
Fixed rates starting (APR)
12.74%
Variable rates starting (APR)
N/A
Visit website
Lender

Edly

Best for income-based repayment loans

ScholarooRating
4.3/5
Fixed rates starting (APR)
6.97%
Variable rates starting (APR)
N/A
Visit website
Lender

Ascent

Best for students with a 3.0+ GPA

ScholarooRating
4.8/5
Fixed rates starting (APR)
12.71%
Variable rates starting (APR)
12.96%
Visit website
Lender

A.M. Money

Best for borrowers with no credit score

ScholarooRating
5/5
Fixed rates starting (APR)
7.95%
Variable rates starting (APR)
N/A
Visit website

#1 Funding U Student Loans

Best for high-achieving students without a cosigner

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Funding U

4.4
Scholaroo Rating
Fixed Rates Starting (APR)6.99%
Why We Like ItPros and ConsEligibility RequirementsRepayment Terms

Funding U provides loans to students with no credit and their loans never require any cosigner either. They base their lending decision on the student’s academic achievement, course load, likelihood to graduate on time, and projected future earnings. This, according to them, are better indicator of a loan repayment guarantee than good credit.

They have a great support system as every student who is pre-approved is assigned a fully dedicated loan officer who helps the student through the whole process and also guides them towards what is best in their specific scenario. They do not charge any fees making the loan overall cheaper for students to borrow.

Funding U, however, does not offer loans to graduate students and undergraduate students can only borrow $3,000 to $20,000 per school year. Moreover, they do not operate in all states and have limited repayment options.

Pros

  • No minimum credit requirement
  • Cosigner is never required
  • Every student gets a dedicated loan officer
  • No application, origination, cancelation, or pre-payment penalty fee

Cons

  • Low maximum limit for borrowing comparatively
  • Only fixed-rate loans available
  • Not available to international students
  • They only offer loans to undergraduate students
  • Must be a U.S. citizen, permanent resident, or DACA recipient
  • Must be 18 years or older
  • Must be enrolled as a full-time student at a partner college or university
  • Must be a resident of a qualifying state
  • Must have never filed for bankruptcy

FundingU has two repayment options while you’re in school:

  • Fixed monthly $20 repayments (during school and the six-month grace period after graduation)
  • Interest-only payment (during school and the six-month grace period after graduation)

Full repayment starts six months after graduation and the total loan payment is 10 years.

#2 MPOWER Financing Student Loans

Best for international students

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MPOWER

4.5
Scholaroo Rating
Fixed Rates Starting (APR)12.74%
Why We Like ItPros and ConsEligibility RequirementsRepayment Terms

MPOWER is the best lender for international students looking for an independent student loan without a cosigner or a minimum credit score requirement. MPOWER does not base its decisions on the borrower’s credit score or history but on their future earning potential. They also have refinancing options for international students.

With MPOWER no credit loans, you can borrow up to 100% of the cost of attendance including your school-certified living expenses in the U.S. Moreover, they provide visa support to international students along with career services. By making on-time payments on their loan, international students can start building their credit for wider future financial opportunities. Moreover, upon approval for their loans, international students become automatically pre-qualified for a Zolve U.S. credit card and bank account.

If international students have any credit history available within the U.S. or their origin country, MPOWER does review it. For those who do not have a credit history, their applications will not be impacted negatively.

Pros

  • Approval for MPOWER loan pre-qualifies the international student for a U.S. credit card and bank account
  • International students can borrow up to the full cost of attendance
  • Doesn’t require a cosigner
  • No minimum credit score required for approval
  • Visa support

Cons

  • Reviews credit history if present
  • Charges a 5% origination fee
  • Only fixed-rate loans are available
  • Must be a U.S. citizen or permanent resident, DACA recipient, refugee, or asylum-seeker
  • Must be enrolled at an eligible school
  • Should be an undergraduate or graduate student
  • Be within two years of your graduation date

With MPOWER you’ll make interest-only payments while you’re in school and for six months after graduation. After that, full payments are due, and the maximum loan term is 10 years.

#3 Edly Student Loans

Best for income-based repayment loans

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Edly Student Loans

4.3
Scholaroo Rating
Why We Like ItPros and ConsEligibility RequirementsRepayment Terms

Edly was founded in 2019 and only offers income-based loans to students in the U.S. The company offers student loans in 45 states and offers both graduate and undergraduate loans for students in more than 1,700 schools.

Their student loans are available from $5,000 to $25,000 with repayment terms of either five or seven years. Your total payments are capped at 2.25 times your loan amount.

One benefit of Edly is that borrowers who earn less than $30,000 annually don’t have to make payments during that time. Edly also doesn’t require borrowers to have a cosigner.

Pros

  • Loan repayments are based on a borrower’s income
  • Borrowers, who earn less than $30,000, do not make payments
  • No cosigners required
  • No minimum credit requirement

Cons

  • The maximum loan amount is $25,000
  • Not available to sophomore and freshman students
  • Must be a U.S. citizen or permanent resident
  • Must be enrolled at an eligible school
  • Must be within two years of graduation

Since Edly offers income-based loans, your repayments will depend on how much you earn. However, you’ll never pay more than 2.25 times what you’ve borrowed. If you earn less than $30,000 a year, you don’t have to make payments at all and it still counts toward the repayment period cap – which is 10 years.

Here is a summary of the repayment terms:

  • Payments start four months after graduation
  • No payments if your income is less than $30,000
  • Deferred payments during unemployment
  • If you want to repay early you’ll have to pay up to the cap of 2.25 times the borrowed amount

#4 Ascent Student Loans

Best for students with a 3.0+ GPA

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Ascent

4.8
Scholaroo Rating
Fixed Rates Starting (APR)12.71%
Variable Rates Starting (APR)12.96%
Why We Like ItPros and ConsEligibility RequirementsRepayment Terms

Ascent offers a Non-Cosigned Outcomes-Based Loan that does not require a minimum credit for approval. The loan is disbursed based on the student’s GPA. To be eligible for the loan, must have a GPA of 3.0+ and should maintain their school’s Satisfactory Academic Performance (SAP).

Ascent provides a deferment in repayment with a grace period of 9 months for those who prefer it. Also, for this particular non-cosigner academic performance-based loan, they offer a higher autupay discount of 1.00% which can help to lower the rates for students and make the loan cheaper.

Moreover, Ascent charges no fees including no application, disbursement, origination, or prepayment penalty fees. They also reward students upon graduation with a 1% cash back. However, with this loan, they only offer two repayment terms of either 10 or 15 years; whereas, on other cosigned loans by Ascent, borrowers can get multiple repayment terms of 5, 7, 10, 12, or 15 years.

Pros

  • No minimum credit required
  • Loans are available with or without a cosigner
  • 9 months grace period
  • International students can apply
  • 1% cash back graduation reward
  • High autopay discount for non-cosigned loan

Cons

  • International students require a U.S. citizen cosigner
  • Loan terms are limited compared to other cosigned Ascent loans
  • No cosigner release available for international students
  • Available to U.S. citizens, international students, and other eligible non-citizens
  • Must earn at least $24,000 annually
  • International students must have a qualified co-signer
  • Students must be enrolled as a junior or senior full-time or half-time within 9-months of graduation at an eligible school
  • Must have a valid Social Security Number
  • Must maintain a 3.0+ GPA and meet the Satisfactory Academic Performance (SAP) of their school

Ascent has three repayment options for private student loans:

  • Deferred payment while in school with a nine-month grace period after graduation
  • Fixed $25 monthly payments while in school and during the nine-month grace period
  • Interest-only payments while in school and during the nine-month grace period

#5 A.M. Money Chicago Student Loans

Best for borrowers without a credit history

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A.M. Money Chicago Student Loans

5
Scholaroo Rating
Fixed Rates Starting (APR)7.95%
Why We Like ItPros and ConsEligibility RequirementsRepayment Terms

A.M. Money, also known as Chicago Loans by A.M. Money, is a private student lender that serves students at partnered universities, mainly in the Midwest. It differs from most private lenders by evaluating the borrower’s academic performance instead of their credit history.

The company provides income-based repayment plans for borrowers who face difficulty making monthly payments, which is a unique feature among private lenders.

Loans start at 7.53% APR with a repayment term of 10 years. There is also a six-month grace period after you graduate and the maximum loan amount you can borrow is $50,000.

Pros

  • Offers income-based repayment plans
  • Base loan approvals depend on academic performance and time to graduation
  • Does not require a co-signer

Cons

  • Charges a 4.5% origination fee
  • Only available to students at 15 partner colleges
  • Available to U.S. citizens or permanent residents
  • Must be at least 18 years old
  • Must attend an eligible school
  • Must have strong academic performance
  • Applicants should be undergraduate or graduate students at an eligible institution

With A.M. Money your repayments automatically start six months after graduation. However, you can make payments while in school if you want to pay off your loan earlier. Here are your payment options:

  • Full payments while in school as soon as the loan is disbursed
  • Full deferment while in school with payments starting six months after graduation
  • Income-based repayments with a minimum repayment of $50

How to Get Student Loans With No Credit Check

The following are ways to get a student loan if you do not have credit.

Step 1: Apply for FAFSA
The first thing to do is to apply for FAFSA. FAFSA helps determine what kind of federal loans and other types of government aid you are eligible for as a student.

Step 2: Exhaust all Federal Options
Exhaust all the federal options you are eligible for to cover the cost of your education before moving on to other options. This is because federal aid comes with flexible repayment options, has the lowest interest rates that are fixed, and may also be eligible for forgiveness.

Step 3: Look for Scholarships and Grants
It is good to apply for scholarships to try and cover a bit extra that is needed before moving on to private loan options. This results in having lesser debt overall which will be easier to pay later.

Step 4: Apply for Private Loans
To cover the gap in funding, you can opt for private student loans. Most private student loans require at least a good credit score to qualify but you can apply with a cosigner to get a loan if you don’t have a credit history. Applying with a cosigner regardless of your own credit situation can get you lower rates and better terms on private loans.

If you have no credit or a poor score and want to apply for a loan independently, then you can apply for private loans that do not have a minimum credit requirement. Such lenders consider other things more important when assessing a loan application like academic performance and future income earning potential.

How To Build Your Credit Score for Student Loans

Improving your credit score will help you get better interest rates on student loans and open up more funding options. There are a few ways you can build your credit score.

Consider ways to establish your credit, like getting a credit builder credit card. This will slowly start building your credit history and as long as you make payments on time and in full, you should see your credit score increase in a few months.

Credit builder cards let you start with a low credit limit and gradually build up your payment history. Just keep an eye out for the high APRs that are common with these types of credit. You can also take out a secured credit card, which means you’ll need to provide collateral – typically in the form of a security deposit. It might take up to a year or more to build a proper credit profile, but a higher score will help you qualify for better student loan rates.

However, whether it’s a loan or a credit card, make sure you use your credit responsibly, make on-time payments, and keep your balances low. If you want to improve your credit to qualify for a student loan with good APRs, it’s important to start small, make payments on time, and ensure that your debt-to-income ratio remains as low as possible.

You can also ask your parents to add you as an authorized user to their card. This can get your credit journey started much earlier and by the time you require loans for your dedication, you will have a good credit history established.

Why do lenders check my credit?

You might be curious to know why lenders do a credit check in the first place. It’s a way for them to confirm that you will be able to repay your loan. It’s assumed that those with a good credit score will be timeous with repaying their loans too. A poor credit score may imply that loans will not be repaid on time or they may even default. Credit checks are standard practice during most loan applications.

So what goes into a credit check? Well, it’s basically a risk assessment that lenders do. They’ll check your credit history – how much you’ve borrowed previously and if you paid it back on time, and whether you have any outstanding debt. Your credit score also affects the interest rate of your loan as those with a proven track record, i.e. a high credit score, will likely get a lower interest rate on their loan. Those with a low credit score pose more of a risk to lenders so they usually have a higher interest rate to compensate for that.

Credit checks are also used for eligibility purposes – often loans have a cutoff for credit scores, so they’ll only loan to those who have a higher credit score. By only lending to people with certain credit scores, lenders are protecting themselves – they avoid losing too much from unpaid loans and lower the risk of this happening.

While you are understandably only starting out, so therefore likely don’t have much of a credit history, it’s still good to know and understand what the reasons for a credit check are.

FAQs

Do private student loans require a credit check?

Yes, all private student loans generally require a credit check. However, a few lenders do not have a minimum credit score requirement and they do not base the approval on the applicants’ credit history.

Which type of student loan does not require a credit check?

Federal loans including Direct Subsidized and Direct Unsubsidized Loans do not require a credit check.

Can I still get a private student loan with bad credit or no credit?

It’s possible, but most lenders will require you to have a cosigner if you don’t have good credit. An alternative is looking at private student loan lenders that base their lending decisions on merit, degree type, or future earning potential, and that don’t have a minimum credit requirement.

Which are the best private student loans without cosigner and no credit history?

Funding U is a great option if you are looking for a loan that does not require a credit history or a cosigner.