The benefit of having a co-signer for student loans is that you are granted access to lower interest rates and are more likely to qualify for loans. What do you do if you don’t have access to a cosigner? Thankfully, you still have options to get private student loans without a cosigner.
For federal student loans, you never need a co-signer, so you don’t need to worry about them. For private loans, you need to have a good credit score, which many high school graduates don’t have. Being under 21 doesn’t help your loan application because lenders want some assurance that you’re going to pay the loans back.
There are ways to build your credit quickly in order to qualify for a private loan, but this can take time and many people don’t have the luxury of building up their credit for years before applying for student loans. Here’s how to get a private student loan without a cosigner.
Private Student Loans Without a Cosigner for Students Paying for School
There are private lenders who do not require a cosigner and have different options for paying off your loans. Here’s a list of those lenders to check out:
LendKey gathers funds from a community of lenders to provide to borrowers. You can save money by borrowing with LendKey and you can qualify for a 1% reduction in your interest rate after paying 10% of your loan. LendKey also has some of the lowest interest rates you can find.
Discover Bank gives private loans to borrowers who have good credit scores. You can also earn cash rewards if you have a 3.0 GPA or better. Discover has zero fees, which means there are no loan application fees, origination fees, or late fees.
College Ave has customizable student loan plans that make it easy for graduate and undergraduate borrowers. You can choose from four different repayment plan options and choose the terms of your loans, including the years of repayment.
Sallie Mae will allow students to get a loan without a cosigner under special circumstances. They also have a program by which cosigners can be released after 12 consecutive payments.
You can get a student loan without a cosigner at Citizen’s Bank. They also have the option to release a cosigner after 36 months of consecutive, on-time payments.
Chase Student Loans
Chase Bank provides student loans without a cosigner through American Education Services. You can also release your cosigners after 36 consecutive payments.
You can borrow up to $10,000 per year through Funding University without a cosigner. Then, one month into the semester, students start a repayment plan of $40 a month on their loans.
8. Commerce Bank
Commerce Bank offers private student loans without a cosigner and the option to release a cosigner after 12 months of payments on principal and interest.
Private Student Loans Without a Cosigner for People Looking to Refinance
Some borrowers who have been in repayment for some time may be looking to refinance in order to get a better rate or to release their cosigners from their loans. Here are some options that allow you to do just that:
Social Finance, Inc. (SoFi) is an online personal finance company that provides student loan refinancing, mortgages and personal loans. They offer fixed rates from 3.25% to 7.25% and loan terms from 5 to 20 years.
Earnest is a tech-enabled lender that offers personal loans and student loan refinancing. Their rates vary from 3.25% to 6.32% and the terms are from 5 to 20 years.
CommonBond is a marketplace lender that refinances graduate and undergraduate student loans for university graduates. Their rates vary from 3.18% to 7.25% and the terms go from 5 to 20 years.
Laurel Road is a division of Darien Rowayton Bank that provides low-rate student loan refinancing, personal lending, and mortgages. Their rates range from 3.5% to 6.99% APR and their terms extend from 5 to 20 years.
Compare the Best Student Loan Refinance Rates
Here are our top student loan refinance picks for 2018
How to Get a Private Student Loan Without a Cosigner
Complete Your FAFSA for Federal Student Aid
The Free Application for Federal Student Aid, or FAFSA, will determine your eligibility for federal grants and scholarships. Why are we talking about completing the FAFSA in a post about private student loans? That’s because private student loans should be used to fill in the gaps of any remaining need after you receive federal funding and funding from free money for college like scholarships and grants.
Federal student loans don’t require a cosigner and often have lower interest rates, forgiveness programs, and income-driven repayment plans. You can borrow up to $5,500 as a dependent student and $9,500 as an independent student.
What do you do with the remaining cost of school? Apply for as many grants, scholarships, and other supplemental sources of funding that you can find. This is money that you don’t need to pay back – even $1,000 in grant money can go a long way when it’s $1,000 less that you owe after graduation.
Build Your Credit Before Applying for a Private Student Loan Without a Cosigner
When applying for a private student loan, lenders look at your credit score to determine your eligibility. Your score shows them how you’ve managed your money in the past and whether or not you have paid your bills on time. Your FICO score is the best to go by, which can range anywhere from 300 to 850. The higher your score is, the better interest rate you will get and the greater your chances of being approved. Here are three simple steps to help repair your credit score.
What Credit Score Do You Need to Get a Private Student Loan Without a Cosigner?
Federal student loans do not have any credit requirements for students, but private student loans do. Many students may not know what their credit score is when applying for a private student loan, but this is really important in making sure you will be approved. For a private student loan without a cosigner, you should try to have a good credit score of 650 or above.
You can check your credit score for free and you should consider doing that on an annual basis. That score should be in the mid-600s or higher to qualify for a private student loan. You chances of approval will be higher is you have a FICO score of 690 or higher. You’ll also start qualifying for lower interest rates with a score around 720.
Different lenders have different requirements for their private student loans and they may not always be easy to find. You can complete an application for a rate check with a lender in order to find out if you could qualify. Always check if it’s a soft or hard inquiry first, though, because a hard inquiry will affect your credit score.
Some Alternatives to Borrowing if You Can’t Get a Private Student Loan Without a Cosigner
It can be difficult to get a private student loan without a cosigner and if you apply and are rejected, there are some alternatives to borrowing that you can consider. Think about some other ways to fund your education that you might not have thought of before, for example:
- Applying for Grants and Scholarships
You do not have to return the money awarded to you by grants and scholarships so make sure you apply for as many as you can.
- Working Part-Time While You’re in School
Some schools have work-study positions or there might be businesses near campus that need part-time help. See what’s out there and what can earn you some extra cash, there are lots of good jobs for college students.
- Studying at a Less Expensive School
Take a look at schools in your home state and consider attending a community college before transferring to a four-year institution. This will save you a lot of money in the long run.
- Employer Tuition
Search for employers who will help to fund your schooling. There may be companies near you that offer to pay the cost of your education, which is a huge perk.
Private student loans without a cosigner are not impossible to get, but they can be difficult to obtain if your credit history isn’t lengthy and your score isn’t high. You may find that you run into a few roadblocks along the way of trying to fund your education, but that doesn’t mean you won’t be able to. Take heart if you are not approved right away, because there are other options you can explore that may not have been your first or second choices.
By requesting as little money as you need, making sure know your credit score, building up your credit if possible, and finding a private lender who will lend money to students without a cosigner, you are increasing the likelihood that you will be able to get a private student loan without a cosigner. Your education is a worthwhile goal to pursue wholeheartedly, so if you are not successful in finding the right funding at first make sure you try until you do!