How to Apply for No Credit Check Student Loan

Fortunately bad credit score is no more a disadvantage in availing a student loan. Majority of student loan programs and aid packages do not perform credit checks. Most of the Federal loans are need based and do no perform a credit check on the applicant which benefits those with poor credit scores.

There are few loan programs such as Pell Grants which funds on the basis of the grantee’s economic Status. The beneficiaries of such loans are the students of parents from low-income category. However, the economic status has to be substantiated by supplying appropriate documents as with any other federal aid.

The factors that determine the disbursal of Pell Grants are such as the EFC (Expected family Contribution) that plays an important role in approval of the loan and the cost involved in education to derive at the final loan amount. Pell Grants is more like a gift for those in needs and the maximum disbursal amount per applicant is $4,050 for a year. For most of the students this amount may be substantial enough to meet the expenses. However, if the annual tuition cost is higher than this amount, then they may have to look for other options to fund their education.

In addition to Pell Grant there are other need based and no credit student loan programs such as Stafford Loans. There are two types of Stafford loans, subsidized Stafford loans and unsubsidized Stafford loan program. Subsidized loans are most preferred since the accrued interest when the loan is not repaid will be paid by the Government. That period is eventually when the student is in school or during the first six months after leaving school.

In the case of unsubsidized Stafford loans, the interest on the principle that’s outstanding is to be paid by the student. If the installments are paid promptly while attending school the may be modest. For instance a loan amount of $4000 for tenure of 120 months, with 5% interest rate, would carry a monthly payment of $42.43 wherein the interest would be about $9 only. However, if left unpaid the amount accumulates to a substantial sum of repayment after school or graduation. When the amount is unpaid, it accumulates with the principle, and interest is applicable to the entire amount.

The benefit of unsubsidized Stafford loan is that they are easily available to students than any other loan programs. However, usually the loan may cover about 25%-40% of the entire educational cost. Hence the students may have to supplement the loan with other loans.

The limit ranges are fixed such as for the first year up to $3,500 and increases every year and during 3rd and 4th years, the total amount mounts to $5,500 for undergraduate dependent student. However independent students benefit from higher loan amount that ranges of up to $10,500 per annum. Student pursuing higher studies after graduation may borrow $20,000 with a total of about $138,500 throughout the education. Since the fees for the loans may be up to 4% the total amount funded may be slightly lesser than the stated amount.

Further break up on the amount is available at http://studentaid.ed.gov/PORTALSWebApp/students/english/studentloans.jsp and http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/federal_student_loans/stafford_loans/

Another popular loan program to offer no credit check student loan is the Perkins Loan. Dependent undergraduate student applicants may avail loan amount up to $4,000 with interest rate of about 5% and cap of $20,000. Further details are provided at http://studentaid.ed.gov/students/publications/student_guide/2005-2006/english/types-perkinsandstaffordloans.htm.