If college is just over the horizon for you, you may wonder if you get a school loan without having a credit history. The good news: it’s usually possible. Getting money to help pay for school is an important consideration for students who want to continue their education. Every year, about 60% of students opt to borrow student loan funds to help pay for their college education, so if you’re not able to write a check to fund your whole college education, that doesn’t have to put your goal out of reach.
Student loans are generally either privately- or government-sponsored. However, you might need a mixture of private and government loans to afford the college of your choice, especially given the rising costs of education, and if your scholarship offer isn’t as robust as you hoped it might be. Without already established credit, you may need a co-signer with you on the loan as a guarantee to the lender.
Private and government loans differ in a couple of important ways that aren’t always immediately obvious, for instance, private loans may require a credit check. If you haven’t established credit yet, that’s when you’ll need to look to a cosigner to join your application. By contrast, government loans sometimes don’t require credit checks at all. Government loans also can have more availability options and different conditions for repayment schedules, or even loan forgiveness in certain circumstances.
Along with your education, establishing good credit can be an important factor when applying for loans or credit cards. The better your credit, the more likely you’ll be approved for loans with lower interest rates – including educational loans. We all learn about credit in different ways – discover why it’s better to establish good credit sooner than later, and how it can benefit you long-term.