You want to get the training you need for a better job, but you’re worried about the cost. With the average undergraduate tuition sitting at $7,734 per year — or $41,746 if you’re an international student — you may need to take out a loan to pay for school1.
If you have poor credit, you may wonder if obtaining a student loan is possible. Bottom line up front: it is, but will take some extra work. Here’s everything you need to know about finding a student loan when you have bad credit.
Key Points
- You can get a student loan with bad credit through the government, banks and private lenders.
- Government loans don’t require a credit check, and private loans or bank loans may be available with a co-signer or steady income.
- Government student loans are the most accessible and affordable, offering no credit checks, no federal interest, and repayment assistance options.
- Alternative funding options like scholarships, bursaries, and co-op programs can help reduce or eliminate the need for student loans.
Can You Get A Student Loan With Bad Credit?
Yes, it is possible to get a student loan with bad credit; you just need to know where to go and how to maximize your chances of getting approved.
In the following sections, we cover the types of lenders that offer loans to students with bad credit and what you can do to improve your chances of getting approved.
Bad Credit Student Loans From A Bank
Banks usually offer student lines of credit to both domestic and international students. To qualify, banks will consider your credit history, debt, and income. If you have bad credit, you may still qualify; however, you’ll generally need to have a co-signer to back the loan.
For example, at TD, co-signer requirements are based on your credit history. If you’re an undergrad with no credit or poor credit, you’ll usually need a co-signer to qualify. Similarly, if you want to apply for a TD line of credit as an international student, you’ll typically need a co-signer who’s a Canadian resident and is also a TD customer in good standing.
| What Is A Co-Signer? A co-signer is someone with a high credit score and finances who is willing to repay your debt if you’re not able to. A strong co-signer can make your bank feel more secure about lending you money and can increase your chances of getting approved. For most debtors, a cosigner may be an immediate family member or a close friend. |
Bad Credit Student Loans From Private Lenders
Getting approved for financing with bad credit is easier with private lenders, as they face lighter regulations and have more flexibility when it comes to loan criteria.
However, these loans are not typical student loans; instead, they’re personal loans that you can use to fund your education.
If you have bad credit and no co-signer, private lenders may still extend you money, especially if you’re a mature student with steady income. But, it’s important to note that these loans come with higher interest rates, no grace periods, and immediate repayment.
Private Personal Loan Features:
With a private personal loan, you can borrow a fixed amount of money and then pay it back over a predetermined period of time, including interest and fees.
- Loan Amount: Varies, often $500 to $50,000
- Terms: Typically 1 to 5 years
- Interest Rate: Higher for bad credit (often 9.99% to 35%)
- Repayment: There are no repayment grace periods, like having 24-months after you graduate to start repaying your principal
| Note: Private loans tend to have less strict borrowing criteria, making them easier to qualify for but often more expensive. As such, before taking on a private loan, look into other, more cost-effective options like government student loans. |
What Do You Need To Apply For A Bad Credit Student Loan?
In addition to your credit score and financial information (sources and amount of income), your lender may also ask for:
- Personal Identification: Can include your passport, driver’s license, or other valid government-issued ID, plus social insurance number (SIN).
- Proof Of Employment: You might provide your pay stubs or an employment letter.
- Proof Of Enrollment: To prove your student status, you might provide a copy of your course timetable, an unpaid tuition invoice, or a receipt from paid tuition.
- Monthly Expenses: What you spend on loans, credit cards, and lines of credit.
- Household Expenses: What you spend on utilities, property taxes, insurance, etc.
| Should You Get Credit Insurance? Credit insurance, also known as debt insurance or balance insurance, helps you and your family pay off your loan or line of credit if you lose your job, have an accident, get sick, or die. It’s worth considering if you lack savings, have unstable income, or want to protect your family from your debts. But if you already have life or disability insurance, a steady job, or the policy is costly and full of exclusions, it may not be necessary. |
Can You Get A Government Student Loan With Bad Credit?
The Canada Student Financial Assistance Program (CSFAP) provides eligible students with grants, loans, and repayment assistance to help students who come from low and middle-income families2.
Before the 2023-24 academic year, the CSFAP required students 22 years and older to undergo credit screening to reduce the risk of loan default.
As of August 1, 2023, the federal government waived this credit check requirement.
Now you can apply for a student loan from the government without a credit check. But there are other requirements you must meet to qualify, such as demonstrating financial need.
Government Student Loan Features
Government student loans are available to both full-time and part-time students. You only need to submit one application through your province or territory. When you apply, your province or territory will also assess your eligibility for grants.
Other important features of government student loans include:
- No Credit Check: Thanks to recent updates, you don’t need to worry about a bad credit score because there’s no credit check.
- No Federal Interest: Recently, the government eliminated interest for the federal portion of your student loans, but you still have to pay interest on the provincial portion of your loan. For example, in Ontario, you have six months after you graduate before you need to start repaying your provincial student loan.
- Repayment Assistance Plan (RAP): If you’re struggling financially and can’t make your student loan payments, the Government of Canada offers assistance through the RAP and Repayment Assistance Plan for Borrowers with Disabilities (RAP-D).
Provincial Student Loan Programs
While federal programs like CSFAP are widely available, many provinces offer additional student loans, grants, and repayment assistance programs.
For example, in Ontario, Ontario Student Assistance Program (OSAP) provides funding for students regardless of credit history. And in British Columbia, the provincial student assistance program also has similar provisions.
Exploring both federal and provincial programs can maximize your funding options and reduce the reliance on high-interest private loans.
How To Improve Your Chances Of Getting A Student Loan With Bad Credit
If you have bad credit and want to improve your chances of qualifying for a student loan, here are a few tips to consider:
- Add Collateral: If you’re applying for a personal loan to cover your tuition, consider adding collateral to back the loan. This will reduce the lender’s risk and make it easier for you to qualify.
- Add A Co-Signer: Having a co-signer with strong financials and a solid credit score can improve your chances of qualifying for student loans. Make sure you both understand the consequences if you fail to make your payments.
- Find Steady Employment: With some lenders, having a steady source of income can improve your chances of getting approved. This helps to show that you have the ability to repay your loans.
| Ultimately, your goal is to build credit to open up more financial programs to cover your educational costs. To improve your credit score, focus on paying your bills on time, only apply for credit when you need it, and avoid maxing out your credit cards. A higher credit score can help you qualify for more loans with better terms. |
Extra School Funding Sources
In addition to student loans, there are other ways you can fund your education, including:
- Scholarships & Bursaries: These are given based on merit or financial need and don’t require a credit check. You also don’t need to repay the money.
- Co-Op Programs: In a co-op program, your school helps to match you with a job that’s relevant to your studies. Typically, you go to school for a term and then do paid work for a term. The money you earn during the paid work terms can help to fund your education.
- Work-Study Programs: The Government of Canada offers several loans and credits for those pursuing work-study programs. The Canada Apprentice Loan lets you borrow up to $4,000 with no interest to cover the cost of apprenticeship. The Canadian Training Credit is a refundable tax credit meant to help cover the cost of tuition and course fees. The Windmill Microlending program offers low-interest career loans to newcomers.
Additional Tips for Getting Student Loans With Bad Credit
Here are some extra strategies to help you secure a student loan even if your credit isn’t perfect.
Explore Credit-Building Options Before Applying
If possible, take time to build or improve your credit before applying for a loan. You can do this by paying off existing debts, keeping credit card balances low, and ensuring all bills are paid on time. Even a slight improvement in your credit score could improve your eligibility for loans with better terms and lower interest rates.
You might also want to consider small lines of credit as a way to establish or rebuild credit history before applying for larger education financing. Here are a couple of options to consider:
KOHO Credit Building
KOHO Credit Building is a line of credit that works by reporting a monthly subscription fee to the credit bureau, helping users build a positive credit history. You’ll need to pay a monthly fee and keep enough funds in the account to cover it. Keep in mind that you can’t actually access any credit from the line; instead, the account is used to build credit.
Nyble
Nyble is a Canadian financial tool that provides an interest‑free credit line designed to help users strengthen their credit profiles. It doesn’t require a deposit or an existing credit history, making it accessible to those rebuilding credit. Each repayment helps you build good credit over time. Plus, you’ll have access to funds with no interest or late fees.
Consider Peer-to-Peer Lending Platforms
Online peer-to-peer (P2P) lending platforms have become increasingly popular as an alternative to traditional banks. These platforms allow individual investors to fund your student loan instead of a financial institution.
P2P lending often considers other factors besides your credit score, such as education potential and income. This flexibility can make it easier for students with poor credit to access necessary funds. Keep in mind, however, that interest rates may be higher with P2P lending than government loans.
Budget & Plan Your Loan Repayment
No matter what type of loan you apply for, it’s important to plan repayment carefully. Use a budgeting tool to plan your monthly expenses, including tuition, rent, food, and transportation. Prioritize timely payments to avoid damage to your credit and instead build good credit.
A clear repayment plan ensures financial stability and helps you build a strong credit score to help you strengthen your borrowing power in the future.
Get Financial Advice
Schools often have financial aid offices that offer counselling for students with bad credit. Their advisors can guide you through government programs, co-signer requirements, and alternative financing options. Consider using these resources to help you make more informed decisions about how much to borrow and the best repayment strategies.
Bottom Line
Getting a student loan with bad credit in Canada is possible, especially with government programs or secured private loans. Using collateral or a co-signer can improve your chances of approval, but it’s important to borrow responsibly. Planning ahead and understanding your repayment options will help you fund your education without risking your financial future.
Student Loan with Bad Credit FAQs
Does OSAP require a credit check?
Can I get a student loan if I have bad credit and no cosigner?
Can I get a student loan if I have no credit?
Will a student loan build my credit?
References:
1Statistics Canada. (2025, September 10). Canadian and international tuition fees by level of study (current dollars). 150.StatCan.gc.ca
2Government of Canada. (2023, June 23). Regulations Amending the Canada Student Financial Assistance Regulations: SOR/2023-157. Gazette.gc.ca
