I am applying for student loan and I have bad credit

Kevin RN08 · Sep 25, 2008

I don't know that you can directly transfer credit card debt to a student loan.

Your Fin Aid Advisor will probably see your credit score, so there should not be a need to re-share that information unless there are extenuating circumstances to explain your poor credit score.

You may look into Sallie Mae's "Tuition Answer" Loan to supplement the more traditional loans. The intrest rate is determined by your credit score (yours may be high), but it is deferred.

LeavingTeaching4RN · Sep 25, 2008

Are you applying for a private loan or a federal loan. Fed loans aren't based on credit. In this market, I'd be very surprised if someone with bad credit qualifies for a private loan without a qualified cosigner. I'm wondering how bad is your "bad credit" b/c credit cards bills can be dismissed during bankruptcy but the only ways to get rid of student loan debt is to pay it, become permanently disabled, or die.

beth66335, BSN, RN · Sep 25, 2008

I'm pretty sure student loans are for school expenses only. I have applied for (and not recieved) many student loans and they are very clear about what the money can be use for. If your loan pays directly to the school which many of them do you will only be able to use them for current school expenses. On the other hand if any of your debt is school related, and you can document this, some loans may allow you to pay that part off with their money...it can't hurt to ask!

LeavingTeaching4RN · Sep 25, 2008

Beth is right about student loans being used for the current year's school expenses. But the truth is when the money is in hand, you do what you need to do. With that said, If you plan to used the money for your cc debt, do not under any circumstances ask the lender for permission.

jimbojonesey · Sep 26, 2008

If it makes a difference, my credit card debt accumulated the time I stopped work at my job and started school. I have totalled 6000 dollars in debt so far, just living off of my credit cards. I should have applied for a loan earlier

Kind of off topic but I should have applied for unemployment benefits earlier too instead of waiting 2 months later. Had i did, i may not have had this debt at all. I currently have a debt of 6,000 dollars :zzzzz

So in a way, this debt is an accumulation of my living expenses since going back to school. Will this make a difference in the eyes of the lender? More specifically, will they see this reason as school related expense and approve me of a school loan that I really need?

jimbojonesey · Sep 26, 2008

Your Fin Aid Advisor will probably see your credit score, so there should not be a need to re-share that information unless there are extenuating circumstances to explain your poor credit score.

I was told by one of the financial aid advisors to not tell them that the reason I am applying for student loan is to transfer bad credit into a more stable no interest paying student loan while I'm in school. But I am not sure why she said that, nonetheless it got me kind of worried.

I have an appointment next week with another financial aid worker at my school, and I am not sure whether or not she is the person that approves me of How much/and if I get any student loan money so yeah this is the reason I posted this question on here. She may or may not be the one that decides whether I get financial aid, and so I need to know what I generally should and should not say in order to recieve a student loan.

I truly believe that I am using this Financial aid money for a good and worthy cause. Once I transfer my debt to a student loan, I will not accumulate any more debt because I have figured out a way not to spend any more money than I already have (long story short I've worked out a budget), and once I graduate and start working as a nurse, I can pay off my debt within a year. So this is a good student loan for me, one that pays off unlike the first loan I got when I was pursuing my first bachelor's degree..

Kevin RN08 · Sep 26, 2008

For the lines of credit through the fed you both are correct the interest rate is not credit based.

As we've learned recently Sallie Mae and her sister Fannie Mae are not Federal entities and therfore your credit rating comes into play. The Tuition Answer loan is the only deferred "private" loan that I could find, there may be others but I couldn't find one. It seems designed for those of us who are non-traditional students (with families, house payments / rent, etc). The interest accrues during the deferment period and isn't at the most attractive rate (even w/good credit), is subject to adjustment (meaning the rate could go up if the fed raises rates), but I'm hedging my bet that the Fed keeps rates low for the near future then I plan is to roll the debt into a HELOC / mortage based loan immediately following graduation and employment (it will then be more tax deductible) with a lower intrest rate during the pay off.

Jimmy- If you were earning a good wage while working you may find yourself behind the eight ball for this academic year, as this year's aid is based off of your FAFSA and your 2007 Tax return (the one you filed in April 2008), with no exeptions for "life changes" that I could find. The good news is in academic year 2008-09 you should qualify for substantially more.

Kevin RN08 · Sep 26, 2008

I was told by one of the financial aid advisors to not tell them that the reason I am applying for student loan is to transfer bad credit into a more stable no interest paying student loan while I'm in school. But I am not sure why she said that, nonetheless it got me kind of worried.

Have you used the credit card to pay tuition? My school breaks the annual aid up by fall and spring semesters then pays your tuition first and provide's you with any surplus. If you have nothing outstanding, it should all come to you, which maybe why she said that, I don't think that she's steering you down a unethical road if that's what concerns you. I'd give them the facts and nothing more, all they really need to know is what is on the FAFSA, and any further info such as your Major, Interests/Hobbies, Associations, etc for scholorship opportunities.

Have you done a FAFSA? If not apply for your PIN and get the online form(s) filled out ASAP to speed things along before you get to the Fin-Aid Office.

jimbojonesey · Sep 26, 2008

I don't have any outstanding payments with the school and my fafsa has already gone through. I am just waiting for the loan. Although, I may let them know that I am now paying rent, maybe they would give me a bigger loan if they knew that. I don't know.

cursedandblessed · Sep 26, 2008

Go update your FAFSA with the rent info if there's a space. it could mean the diff between getting grant or just loans.

If you are no longer working and your income has changed considerably that can be taken into account. I'm not sure how you do that, but I read that on the FAFSA site somewhere.

Pretty much the only reasons you can't get a federal loan are drug convictions or defaulting on a previous student loan (that can be rehabbed after a year or so of paying back though).

I wouldn't say anything about the credit cards, .

if you are applying for this current semester (fall 2008) and you've already paid your tuition and books and have no outstanding balances at school more than likely the entire amount will be given to you by the school. (mine goes to the school, then the school cuts us a check after a certain number of classes are attended-we got ours last Saturday).

Then you can use the money to repay what you've borrowed on the credit cards, and your other expenses.

AtomicWoman · Sep 26, 2008

Since your FAFSA is done, look at the SAR they should have sent you by email. The SAR will have a line at the top called EFC (expected family contribution). The EFC will impact your total financial aid eligibility, so if there are changes in your financial situation, you need to update/amend your FAFSA. Your financial aid counselor should be able to tell you exactly what to do.