What Credit Score Do You Need to Get a Student Loan or Tax Loan?

If you’re facing some school expenses you don’t have the cash to cover, you’re probably asking where you can find the money. You likely work and are trying to earn a new certificate or degree, but getting more hours to turn up the cash would take time you don’t have. So you turn to loans. Student loans? Tax loans? With your low credit score, which, if any, can you actually get?

Bad Credit is Not an Issue for a Tax Loan

As a working adult you have to deal with taxes, and at this time of year a tax loan is probably on your radar. To get approved for tax loans you do not need to have proof of a refund from your tax filing and you also don’t have to show that you have a perfect credit score. Most lenders offering these loans look mostly at what you earn to get you approved. With a regular paycheck and a bank account where they can transfer the cash, you will likely get approved. There is no guarantee that one of these lenders won’t check your credit, but most never do.

Student Loans and Credit Checks

Whether or not you need to have a good credit score for a student loan depends on whether you are applying for one that is private or through the federal system. Federal student loans are based on need, so there is no credit check. A private lender offering student loans will approve people much like other traditional lenders, based on credit history and score. If you don’t have a credit score of 650 or higher you are unlikely to get approved. And with a score on the lower end of the acceptable range, you’ll probably be facing higher interest rates.

A Student Loan Can Be a Long-Term Burden

Even if you go with a federal student loan with no need for a credit check, there are some big downsides. One is that this is a big loan that will require long-term repayments after you complete a degree. You will need to be sure you can get a better-paying job or a raise from your current position so that you can handle the payments later. For many graduates this kind of loan becomes a major burden. You run the risk of going into default and suffering even worse credit damage.

Tax Loans are Short-Term and Affordable

On the other hand, a tax loan is a smaller loan with a short loan period. This makes it much more affordable than a student loan. And, credit is not usually an issue with getting approved. If you’re a working student your expenses for college are probably lower because you’re taking one or two courses at a time. This makes a tax loan a good solution if you need to cover the rest of tuition this semester or pay some smaller fees, like lab or book costs. For credit and other reasons, a tax loan is a smart solution to help fund your education.

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