Can I get a loan?

March 28, 2015 6:17 PM

My credit is in the toilet. I want to take out a personal loan so that I do not need to work full time while I go to school full time. Is this even possible?

My credit score is 570. I have $2500 in credit card debt and $5000 in student loan debt. I signed up with money management international (credit counseling) and consequently my oldest (and only) credit card was closed. So, I imagine my score will take another hit. I haven't managed to save much money as it all goes to tuition but this month my car loan is payed off so I will have some extra cash to sock away.
I have three semesters left in a nursing program and I don't think I can survive if I continue to work full time. My school is very affordable at $1000 (down from $2000, just became instate resident) per semester so I won't need a student loan (I've been paying my way through). I think I'll be able to save $4000 by September, and instead of putting it toward my debt I want to reduce my hours at work significantly until next May.
But I will need more than the $4000 to live off of for 8 months. I know this is a naive question, but do loans exist for people with bad credit? When I google it I get sketched out. My debt right now is manageable but I don't want to screw myself over. If I take out a loan will I need to start paying it back right away ? Will anyone loan to me if I am in credit counseling? What are my options? Is this a terrible idea?

posted by pintapicasso to Work & Money (6 answers total)

Federal student loans don't do credit checks. PLUS loans, which you get if you need more than the yearly maximum, do care if you're currently past-due on stuff, but not strictly speaking on the score itself. If you're several years into the program and you only need a few grand a semester, you should be able to cover all of it with Stafford loans. This is basically how I did law school--I wasn't paying tuition, but I was paying rent with the loans. The school has a budget that provides for an average amount of living expenses, it's not much but it's generally enough to live on, and you aren't limited to only taking student loans for tuition, you can use student loans for that amount, too.
posted by Sequence at 6:22 PM on March 28, 2015

One suggestion would be look into peer to peer lending such as a personal loan from Lending Club
posted by z11s at 7:08 PM on March 28, 2015

Seconding Sequence; this is part of what federal student loans are designed to help with. Go this route, your interest rate will be lower than any other possibility out there.
posted by stormyteal at 7:15 PM on March 28, 2015

Yes, to clarify, you can use student loans for living expenses. When I was a grad student, being paid starvation wages for teaching (and receiving a full tuition waiver), I still qualified for thousands of dollars in student loans.
posted by rockindata at 8:18 PM on March 28, 2015

I used to work in a financial aid office at a large university. I saw far, far worse credit-wise. Federal Student loan programs are the way to go, especially on the interest front - the interest is a lot lower than a personal loan, and right now* the interest is deductible on your taxes once you've started repaying them.


*I say right now because it comes up every so often that lawmakers want to remove this from the tax code, but it hasn't happened yet that I know of.
posted by RogueTech at 8:54 PM on March 28, 2015

I am in school and I have been using my loans to help supplement my income to cover my living expenses, textbooks etc. The only issue is it sometimes takes awhile for the loans to clear my account, and I often don't get the refund check until mid-semester, so I have had to plan accordingly.
posted by momochan at 9:27 AM on March 29, 2015