how to get a loan without a cosigner

how to get a loan without a cosigner

Here’s How to Get Student Loans Without a Cosigner

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Around 70 percent of college students rely on student loans to pay at least part of their educational costs, according to CNBC. That means you’ll likely need to figure out how to get student loans before you start college. And depending on whether your parents can help, it also could mean figuring out how to get student loans without co-signer support.

The good news is students can obtain Perkins Loans, Direct Subsidized Loans, and Direct Unsubsidized Loans without a co-signer. Most students need cooperation from their parents while applying for these loans, however, since parental financial information must be provided during the application process. Graduate students also might be able to obtain PLUS Loans without a co-signer.

Unfortunately, while some students can qualify for private student loans without a co-signer if they have income and good credit, most students will need to rely on parental help to qualify for private loans.

Often, parents do help with the process of getting educational loans by co-signing to make it easier for their child to obtain money to cover tuition, fees, and expenses.

“More than 90 percent of private student loans to undergraduate students and more than 75 percent of private student loans to graduate students require a creditworthy co-signer, which is usually the parent,” said Mark Kantrowitz, publisher and VP of strategy at Cappex. Other parents take out Parent PLUS Loans directly.

Still, getting help from your parents isn’t always an option. Even when it is, it’s not necessarily the best choice for you and your family. Here’s how to take out student loans without parents.

How to get student loans without a co-signer

When you take out student loans, there are two primary options available to you: Federal loans and private loans.

Federal loans should usually be the first choice as you decide how to take out a student loan, as their repayment plans provide a great deal more flexibility. That flexibility includes options such as income-driven repayment plans, forbearance and deferment, and federal forgiveness programs.

Private student loans, on the other hand, don’t offer these same benefits. While some private student loan lenders offer hardship options for those who experience unemployment or similar financial emergencies, these options vary per lender. That’s why you should only use private student loans to back up or supplement your education costs.

The vast majority of loans are federal loans, with MeasureOne reporting that private loans accounted for approximately $102 billion of the $1.36 trillion student loan market in the 2015-16 academic year.

Federal student loans: How to take out a student loan

The first step to getting federal student loans is the same for everyone: Fill out the Free Application for Federal Student Aid (FAFSA) .

To do this, you will need cooperation from your parents if you’re a dependent.

“If a dependent student’s parents refuse to file the FAFSA and have severed all relationships with the student, the student can still get Federal Stafford loans, but not any other forms of financial aid,” Kantrowitz said.

For most students whose parents help fill out the FAFSA, the involvement of parents doesn’t mean you can’t get student loans without a co-signer. All it means is that your parents’ income will be taken into consideration when deciding how much federal student aid you qualify for.

Keep in mind, “aid” means two things in this context: Student loans (which you do have to pay back) and grants (which you don’t have to pay back).

Still, if you don’t want to include your parents’ information on the FAFSA, see if you’re eligible to declare “independent student” status. You can do this through your college’s financial aid office. That will allow you to fill out the FAFSA using your information, not your family’s.

Once the FAFSA is complete, you’ll receive a Student Aid Report (SAR) several days to several weeks later. This sums up the information you filled out on your forms. Double-check and make sure all the information on the report is correct.

After that, you’ll receive an award letter (electronically or by mail) from your school telling you how much aid you qualify for. When exactly this happens varies per school.

If you qualify for loans in your name, your parents aren’t obligated to repay your federal loans, even when their income is included in your FAFSA. They can, however, take out Parent PLUS Loans, which will be their responsibility to pay back.

There are many different types of federal loans you could get without a parent co-signer that you should consider as you research how to take out a student loan. The U.S. Department of Education lists options that require neither a credit check nor a co-signer, including:

  • Direct Subsidized Loans. Undergraduates can obtain these loans — also called Subsidized Stafford Loans — to pay for a career school or college. Students must demonstrate financial need.
  • Direct Unsubsidized Loans. These loans — also called Unsubsidized Stafford Loans — are available to undergraduates, graduate students, and professional students. Showing financial need is not required.
  • Direct PLUS Loans. These loans are available only to graduate or professional students. While parents of undergraduates can take Parent PLUS Loans, undergraduate students do not qualify for PLUS Loans.
  • Perkins Loans. These are school-based loans for undergraduate and graduate students. Students must show exceptional financial need.

If the amount you qualified for is not enough to cover your tuition, that’s where private student loans come into play.

Private student loans without a co-signer

Private student loans don’t require a FAFSA form, but rather individual applications for each lender you’re interested in borrowing from.

As a student with limited or no income and credit history, it’s not always easy to get private student loans without your parent’s help. According to Kantrowitz, private student loans typically require student applicants to have a creditworthy co-signer.

Even so, it doesn’t hurt to try. Below are a few top private student loan lenders:

None of these lenders charge application fees, which means you could apply for more than one without incurring a large cost. But if you do, make sure to do so in a short period.

Rate shopping will have less of an impact on your credit score if you keep it between 14 to 45 days.

Student loans, no co-signer? How difficult is it to get approved?

Getting private student loans without a co-signer can be easier said than done.

“The key to qualifying for a private student loan on your own, besides having a good job, is to have a high credit score. This means paying all your debts on time, by the due date, for an extended period of time,” said Kantrowitz. He added that missing even one payment could ruin your credit score.

What credit score do you need to get private student loans without a co-signer? For most loans, you’ll need a credit score in the mid-600s to qualify, but you’ll qualify for better rates if your score is around 720 or higher.

As a new college student, you probably haven’t had time to build up your credit. It doesn’t mean it can’t be done – but it might mean delaying your education if you have no other way to pay for school.

You may also have other options if any of your family members are willing to help out. “A student might also qualify for a private student loan without their parents’ help by using someone other than their parents as a co-signer, such as an aunt or uncle,“ suggested Kantrowitz

But, if you can’t find a co-signer, there’s hope: There are ways to start building credit now so you can become eligible for private student loans without a co-signer as fast as possible.

How to continue your education when you can’t afford full-time tuition

Delaying your education might not be an option for you. If you can’t figure out how to get a student loan without a co-signer, check out a few options to get the ball rolling on your education while you work to build credit:

  • Find a full-time job and take one or two night classes. You can earn credits and increase your income, which will help you get approved for student loans without a co-signer.
  • Find a part-time or full-time job with a company that offers tuition reimbursement. You can earn money and credits, as well as tuition money you won’t have to repay.
  • Contact your school about work-study programs. These programs enable students to work for money that will go toward their tuition.
  • Exhaust every scholarship opportunity you can think of. This not only includes academic scholarships, but also those based on your specific interests, talents, heritage, and even area of study.

If you already have begun your education and currently owe student loans, delaying your education could be risky even if you can’t figure out how to take out a student loan, especially if there is a chance you will not return to college.

Around 45 percent of people no longer in college — but who have outstanding student loan debt — say college was not worth the cost, according to Consumer Reports. Approximately 38 percent of the debtors who were upset about their loans didn’t graduate.

And in a USA Today article, Kantrowitz explained money is a prime reason for students to drop out. Students who don’t graduate are four times as likely to default on loans as those who graduate. High default rates show why it is so important to try to find a way to continue funding your education.

Take your education into your own hands

Sometimes federal student loans just aren’t enough. And if you can’t get a co-signer on private loans, figuring out how to take out student loans without parents via other methods is key.

Figuring out how to take out student loans may be the first of many obstacles you’ll face in your adult life. And it’s crucial to remember that many obstacles like this aren’t instantly solved. It’s a marathon, not a sprint.

If you stay the course through sustainable strategies, then you can achieve your goals.

Shannon Insler contributed to this article.

How to Get a Loan Without a Guarantor

A guarantor, which also referred to as a co-signer, is a person who legally commits himself to assuming financial responsibility for loan payments in the event that a loan applicant defaults payment. [1] Guarantors are often necessary if a loan applicant has little or no credit history, or bad credit and wouldn’t otherwise qualify for financing. [2] However, in many cases, a person can get a loan without a guarantor.

Obtaining Financing without a Co-Signer Edit

List of Lenders and Tips on How to Get a Student Loan Without a Cosigner

How To Get a Student Loan Without a Cosigner

The majority of students who apply for private loans will require a cosigner. However if you are looking for a student loan without a cosigner you have options. Here is a list of all the lenders that are offering either federal or private student loans and don’t require a cosigner.

This fact that a cosigner is helpful is particularly true with undergraduate students or any other student without a steady income or a favorable credit history. The cosigner is the person who vouches for the student, they personally sign the loan document and in so doing vow that if the student does not take personal financial responsibility for the loan that they will. Even though the cosigner signs the document, it does not change the fact that the student remains the primary borrower. There are, however, student’s who will receive a loan without a cosigner.

In this article I will show you…

  • The difference between Federal and Private student loans and how it pertains to getting a loan without a cosigner
  • What kind of student loans don’t require a cosigner
  • The questions to determine if you might qualify for a student loan without a cosigner
  • What documents are required to apply for a student loan without a cosigner
  • Federal Student Loans available without a cosigner
  • Private Student Loan Companies offering loans that don’t require a cosigner

What’s The Difference between Federal and Private Student Loans?

If you are interested in getting a student loan and don’t want to use a cosigner than there are a few important differences between a Federal Student Loan and a Private Student Loan.

  • Issued by the government
  • Low-Medium interest rates
  • Capped loan amount (may not cover all costs)
  • Based primarily on the financial need of the student
  • Provided by private lenders (banks etc)
  • Low-High interest rates
  • Loans can cover all costs of College
  • Lenders lend based on student credit score
  • Check you credit score for free – Click Here

What Kind Of Student Needs A Cosigner?

Any student that lacks a positive credit history, including those students who have yet to establish a credit history, will likely require a cosigner from a private institution. Most banks require a student to have a minimum income with an acceptable debt-to-income ratio. This minimum income may vary but it is often $12,000 a year, or more. There will always be those students who qualify for a student loan without a cosigner. These students will have to meet the minimum requirements of the particular financial institution while also having a positive credit history.

There are, however, a number of benefits a cosigner brings to the table:

  • May help the student secure a lower interest rate,
  • May speed the approval process up.
  • It is important to also point out that cosigners are only something that private loans require. Federal student loans do not require cosigners.

Do You Qualify For A Private Student Loan Without Cosigner?

  • Are you over 18 years of age?
  • Do you have credit history – Free Credit Check
  • Is your credit score Modest-Good? – Free Credit Score
  • Are you a United States Citizen?
  • You must also meet the general eligibility requirements put forth by the loaning institution

Do You Qualify A Federal Student Loan Without Cosigner?

  • Are you over 18 years of age?
  • Are you attending an accredited School?
  • Are you a United States Citizen?
  • Must meet the general eligibility requirements put forth by the loaning institution

What Documentation Does A Student Need During The Loan Application Process?

  • Social Security number
  • A current address and phone numbers associated with it
  • Personal reference information (names and phone numbers of people who can confirm information)
  • Employment information (name of employer, address of employment, work phone number, and gross income)
  • A payment for monthly rent or a mortgage payment
  • More may be needed, check with specific financial information to know for sure

Federal Student Loans available without a cosigner

The Stafford loan is a popular fixed rate student loan. It can be obtained by students with no cosigner. The downside for Stafford student loans is that they will not cover the entire cost of education.

Perkins loans are fixed rate loans given to students in the most need of financial assistance. These loans will cap out at $4,000 per year. If you do not have a cosigner and are in need of financial assistance a Perkins Student Loan is a great option for you to consider.

If you are a parent of a student looking to take out a loan and not use a cosigner the Parent Plus Loan can help. The Parent PLUS loan is available to parents of students.

The grad plus loan is unique from other federal student loans because it is credit based and not need based. It has a relatively high fixed interest rate at 7.9%. A cosigner is not required for a Grad PLUS loan.

A Grad PLUS loan is available to graduate students and can cover the entire cost of tuition.

Private Student Loan Companies Offering Loans That Don’t Require A Cosigner

Private student loan companies can help supplement federal student loans to cover the entire cost of College. If you are looking for private student loans that don’t require a co-signer have a look at the list below for possible loans.

Chase offers a co-signer release which means after 36 consecutive payments the co-signer is no longer responsible for the loan.

You can apply for a CitiAssist Loan for Undergraduate Students without a co-signer. However, their eligibility criteria may make it difficult to receive the loan.

Commerce Bank offers Private Student Loans without a cosigner and also offers a co-signer release option. They do state that applying with a creditworth cosigner may help you qualify.

Discover offers student loans at competitive interest rates and does not require that you apply with a cosigner. Discovers interest rate on their undergraduate loans is as low as Prime + 0%. However, if you do not have a good credit history they may charge up to 10% interest.

Citizens Bank – Requires a cosigner

If A Cosigner Is Used, What Are The Cosigners Responsibilities?

  • Agree to assume equal responsibility for the loan
  • The loan obligation will become part of credit history (this includes any late payments to borrower makes)
  • There may be other responsibilities outlined by the institution that should be requested from the financial institution.
  • After the student successfully makes a certain number of monthly payments, and when they meet a certain credit history requirement the cosigner may be relieved of their future responsibilities with the loan. (This is different at every institution and not necessarily available at every institution either).

If A Student Decides They Would Like To Have A Cosigner, Who Should A Student Ask?

The most important thing for a student to look for, in their search to find a cosigner is someone who is credit worthy. Outside of this factor, there are a number of people in a person’s life who can be their cosigner but in order to ensure that the student will get approved, they must find someone with a positive credit history, someone who is willing to accept the responsibilities that come along with this, and someone who meets the lenders requirements. The bottom line is to find someone with an excellent credit history, and a student may start their hunt asking:

  • Their parents or guardians
  • A relative, perhaps a grandparent, an aunt, an uncle, a cousin, or an older sibling
  • Their spouse
  • Their significant other
  • Someone who supports their educational goals and objectives

In other words, a student should make a list of the people they will invite to their graduations and then begin looking through that list for possible cosigners.

3 Benefits Of Applying To A Student Loan With A Cosigner With Excellent Credit?

1. An increased chance at being approved for the loan

When a student applies for a private student loan with a cosigner, the loan provider takes the loan history and the incomes of the loans primary as well as the cosigner and uses that to determine whether or not the loan is approved. If the student selects a cosigner with a long credit history with excellent credit, the cosigner’s credit history will tag on to the students and enable them to easily, and quickly, qualify for the loan they requested.

2. The increased likelihood of a much lower interest rate

When the student selects a cosigner with an amazing credit history, the lending institution will look to the loan with a very limited risk and that assessment will make the lender desire to be the institution to provide the loan to the borrower even more. This desire will lead the lender to lower interest rates on the loan to entice the student, and the cosigner, to borrow from their institution instead of seeking out a different deal from a competing institution.

3. A great chance to begin establishing a credit history

Establishing an excellent credit history, something that qualifying for the student loan will do, allows a person to be offered the lowest interest rates on the loans they request for their cars and homes in the future, soon after they graduate.

When a person makes the decision to go to school and become a student, this decision must always be coupled with the conversation that determines how that education will be funded. With the price of tuition as high as it is in the United States of America, whether a person is considering their Undergraduate degree, their Masters degree or some other post-graduate education, they must determine how they plan on funding their education and the best way to do so is to go through all of the various financial aid options they may qualify for. When federal loans, grants and other forms of scholarships do not cover the entire cost of financing a student’s education they should then apply for a private student loan with a cosigner with excellent credit lying in the wind.

How to get a loan without a cosigner

If you cannot get a loan approval on your own, some lenders will ask you to get a cosigner. However, it is not always feasible to borrow with a cosigner . If you do not know anyone who is willing to put his credit on the line to cosign your loan, here is some useful info for getting loans with bad credit and no co-signers :

Lenders usually assess your application to see if you are likely to pay back what you owe. Primarily, a lender will look at two things: your accessible income to repay the loan and your credit scores. If you do not think that you can pay the loan back by yourself, a cosigner might be necessary.

A cosigner will have to make payments if you default and he is 100% on the hook for your debt. Adding a cosigner gives lenders another person to collect from as well as two potential incomes. This is why having a cosigner with a high income or strong credit score can be very beneficial to your application.

What to do if you do not get approved

If a lender refuses to approve your loan, you should not just take his word for it. You can try the following solutions but keep in mind that some work better than others do:

If you cannot get a loan without cosigning your loan due to your bad credit, you should work to improve your credit . Whether you have never had the chance to establish your credit or you have missed a few payments, you should start building your credit immediately.

If you are under 21 years, improving your credit will be a challenge. Therefore, you should try to get a cash secured loan or a small credit line from a credit union.

Sometimes you might have errors on your credit report that hold you back. The key to improving your credit is fixing such errors.

A bank approves or denies a loan based on how much money from your income goes towards your monthly payments. To figure this out, they usually calculate your debt to income ratio, which should be as low as possible. If you have higher income from a part-time job, you might be approved because the loan will seem affordable.

Lenders might deny you a high loan amount, but if you borrow less, you could get the money without requiring a cosigner. Do some calculations to see how different amounts have different monthly payments – lower monthly payments result in a much better debt to income ratio. A bigger down payment might also improve your loan to value ratio, making a loan more attractive to lenders.

If you have been told no before, just remember that there are other lenders in the world. You should consider shopping around with smaller institutions such as credit unions and regional banks. Some online lenders are willing to loan money to people with bad credit.

Your available monthly income and credit score are affected by your current debts. Therefore, you should pay down your debt to make getting new loans easier. After you finish paying off your debts, your credit score will rise in a matter of days.

You can use an asset that you already own as collateral and borrow against it. Unfortunately, this is quite risky as you might lose your property if you fail to repay the loan. If you choose to borrow money against your car, the financial institution can repossess it.

How to get a loan without a cosigner?

If you don't have a house, then you would need a good credit. If you have well-valued possesions, you could use your belongings (cars, furniture and others) as a good way to get a loan.

and if you don't have any of those, then, you probably need a cosigner.

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