How get a student loan without a cosigner


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If you need to take out money to cover the cost of college, all options may be on the table. Private lenders may require a cosigner, though the specific requirements vary by lender. 

Do you need a cosigner for a student loan?

No, but it may be difficult without one. A cosigner is a person who legally agrees to repay a loan in the case that you do not. This decreases the risk for the lender and makes it easier for you to get a loan. If your cosigner has a good credit score, you may be able to get a lower rate or borrow more money. 

Lenders will want to see a solid credit score, proof of consistent income, and often at least a couple of years of credit history to offer a private loan. This can be tough to come by for a young student with limited financial background. Generally, the cosigner for most students’ loans are their parents or guardians.

Even if your loan initially has a cosigner, many lenders offer the ability to release or remove a cosigner after you’ve made a certain number of eligible payments. 

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How to get student loans without a cosigner

Try your federal options

You should go after federal loans before considering a private lender, as they often offer better terms and more protections for borrowers. You don’t need a cosigner for federal loans, as they aren’t made based on income or credit. 

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You can take out a Direct Subsidized or Direct Unsubsidized Loan through the federal government. Direct Subsidized Loans are given out based on financial need, while all undergraduate and graduate students can take out a Direct Unsubsidized Loan regardless of financial need. 

The amount you can borrow is capped by the federal government; if you are a dependent student, over the course of your schooling you can take out up to $31,000, and no more than $23,000 of this amount may be in subsidized loans.

Your parents can take out a loan on your behalf with a Direct PLUS Loan, but they are legally responsible for paying these loans back — they aren’t a cosigner on the loan. These loans require a credit check and cannot be transferred from parent to child.  

Boost your credit score

Many private lenders won’t consider a student without a cosigner. Those that don’t require one often mitigate the risk by charging you a higher interest rate and requiring a solid credit score. 

That said, if you want a loan on your own and don’t have a strong enough credit history, here are some tips you may consider to increase your credit score: 

Ask for and look over a copy of your credit report. See if there are any mistakes on your report that could be dinging your score. If so, reach out the credit bureau to talk about fixing the error.Maintain low credit card balances. Keeping a credit utilization rate — the percentage of your total credit you’re using — of 30% or less will prove to lenders that you can manage your credit well.Design a system for paying bills on time. Your payment history makes up a large percentage of your credit score, and lenders like to see steady and reliable payments in the past. Set up calendar reminders or automatic payments so you don’t fall behind.

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Compare loan terms

When you find lenders that will offer you a loan without a cosigner, shop around to get the best terms possible. Lenders often allow you to prequalify and see your rates by inputting basic information on their website. They’ll perform what’s called a soft credit inquiry to display these rates, which won’t impact your credit score.

Here are some lenders you can consider:

Ascent. If you don’t qualify for a credit-based loan without a cosigner, you may be eligible for a future income-based loan from Ascent. You’ll need to be a junior or senior in college and have a GPA of 2.9 or better.Funding U. This lender doesn’t offer cosigned loans, and instead bases its funding decisions on academic achievement, course load, probability of graduating on time, and forecasted future earnings.MPOWER Financing. If you’re an international student, this may be the choice for you. MPOWER offers loans to students from over 190 countries, and bases its loan decisions on your future earnings potential.  

In addition to looking at the interest rates, also take a look at the term lengths. You may want a longer term length to pay less per month, or a shorter term length to save on overall interest.  You’ll also want to consider your repayment choices, as lenders offer a variety of plans including interest-only and deferred payment options.  

Once you find a loan you like, thoroughly read over the terms before signing on the dotted line so you know exactly what you’re agreeing to. 

Options if you can’t get a student loan without a cosigner

Even if you’re unable to snag a student loan without a cosigner, you still have options.

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Reach out to your school’s financial aid office. You may have receive grants or scholarships as a part of your financial aid package, which do not need to be repaid. You might be able to get more of this free aid if you contact your school’s financial aid office and explain your situation. This would lessen your need for loans. Attend a lower cost school. If the price of a school is out of reach, consider going to a school that is more affordable. You may want to look at community colleges or in-state public colleges, as they often come with lower price tags than private schools. Reduce your educational costs. You may be able to close the gap between what you can afford and what you’re paying for school. This could include renting or borrowing textbooks instead of buying them, or finding multiple roommates to lower your cost of living.

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While it’s possible to get a student loan without a cosigner, it’s usually not an easy process without an extensive credit history. You’re best off trying your federal options first, as they often come with competitive interest rates and never require a cosigner. 

Related Content Module: More on Loans

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By: Ryan Wangman
Title: How get a student loan without a cosigner
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Published Date: Tue, 10 Aug 2021 12:54:12 -0400

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