To get an education in the USA is quite expensive, but it provides good opportunities for a future career and future financial capabilities. On the other hand, not many have the opportunity to pay tens of thousands of dollars for college studies, so many are looking for an opportunity to get a student loan. At the same time, young people, as a rule, do not have a good credit, and even more often they do not have a credit at all. To solve this problem, potential students can use the help of older relatives as a cosigner, but this too often causes some difficulties. Let’s look at what opportunities there are to get student loans without cosigner.
Cosigner is needed for young student loan borrowers, since they do not have a strong enough credit, and most often they have a low income, or do not have either one or the other. In this regard, it has become common practice to involve your family as a guarantor in order for them to receive a loan for education.
When applying for student loans, loan approval is often difficult due to the factors described above. Also, not all parents have the opportunity to become a cosigner for their child for various reasons, including because of a low credit rating or low income, as well as due to different intrafamily relations.
Despite this, according to statistics, about 90 percent of all private student loans have a cosigner. If you have the opportunity to connect your family to your student loan, this will help you get loan approval at a lower interest rate and more lenient conditions.
But if you do not have this opportunity, then you will certainly be interested in how you can get student loans without cosigner. In fact, for such cases there are many different options that we have collected for you in this guide. Read on if you need student loans without cosigner.
Federal student loans without cosigner
The federal government has developed many different federal student programs to enable many willing citizens to get an education. You need to apply for student allowance for this. This step is worth taking before you start contacting private lenders for student loans.
One of the federal programs may include scholarships, grants and federal student loans. Federal loans are usually the preferred option for student loans, as they can often provide many benefits, such as various payment plans according to your financial situation, loan forgiveness programs, and the ability to subsidize interest while you study in college.
The use of federal student loans without cosigner offers a number of advantages, in particular the fact that there is no need for a cosigner to participate in the loan process. Let’s take a quick look at the different options for student federal loans.
Perkins as a federal student subsidy program was curtailed in 2017, but it helped those students who showed a good results, met certain qualifications and expressed the need to get a higher degree. If a student, having a high average score, did not have financial opportunities to continue his studies, the program contributed to this.
The federal student program Stafford Credit is now one of the most popular ways to subsidize student learning. Currently there are two main types of Stafford loans that are available to undergraduate and graduate students; these are Subsidized and unsubsidized loans.
Stafford Subsidized Loans provide government accrued interest while the student is studying. These federal loans may be available to you based on your financial needs and have a grace period and a preferential rate.
Unsubsidized Stafford loans do not build on your financial needs. Every student who can provide the FAFSA may be eligible for such financial assistance from the federal government and will be able to receive student loans without cosigner. It is worth remembering that such loans are not subsidized, so you will have to pay all the relying interest, which for 2019 were set for undergraduates in the amount of 5.05% and for graduate students 6.6% of the annual interest rate. At the same time, you will still be given a deferment while you are studying in an educational institution.
Federal Student Program PLUS Credit
PLUS Credit is intended for parents of students who are enrolled in a higher education institution, postgraduate school or one of a particular post-school vocational education institution. This will allow you to get a student loan at 7.6% annual interest rate. Although the PLUS program has a higher interest rate than other federal programs, it’s still noticeably lower than any student loan offer from private lenders. It also provides the opportunity to get student loans without cosigner, which is unlikely with private lenders. In order to be able to participate in this federal student program, parents must have a credit history.
Private student loans without cosigner
Many private banks and companies are also engaged in student loans, but, of course, they offer them on completely different conditions, which can differ significantly from different companies, but in any case, higher interest rates are waiting for you without any subsidies. Despite the fact that student loans all have their own terms and conditions, there are some minimum requirements that most of them make.
Requirements of private lenders to applicants for student loans without cosigner
In order to have high chances for approval of student loans without cosigner from private lenders, it is necessary to meet a number of requirements that we will look at next.
First of all, you must be a US citizen in order to be able to qualify for student loans without cosigner. Very few private companies and banks are ready to consider an application for a loan from non-US citizens without a guarantor.
Credit History and Credit Rating
Further, as is the case with any other loans from private companies, you should have a credit history and preferably a credit rating not lower than average. If your credit score is not lower than 660, then you have a fairly high chance of approving student loans without cosigner from a private lender if the other minimum requirements are met. In this moment, difficulties usually lie, since most of the students have a very short credit history, or do not have it at all.
The same can be said about the credit rating, which young people just have not had time to build. To do this, as soon as possible begin to build your credit. You can use credit cards for bad or missing credit and using small purchases and timely regular payments to gradually build your credit, increasing your credit rating.
The next condition for student loans without cosigner with private lenders is an adequate level of your income. This usually becomes another difficulty for students, as they usually either do not have their own income at all, or, working in low-paid, low-skilled jobs, have a low level of it. Most private lenders want student loans for a minimum of $ 25,000 a year to approve student loans, which is an unattainable figure for an average student.
If approved by a private lender for student loans without cosigner for you, you should understand and rely on the fact that the interest rate on the loan will be noticeably higher than when using the possibilities of federal student programs. When considering loan applications, private lenders first of all assess their risks, so if you apply for student loans without cosigner, then you will most likely be expected to have an interest rate of at least 10% per annum, which is almost 2 times more than, for example, non-subsidized Stafford loans for undergraduates.
Finding a private lender for student loans without cosigner
When you start looking for a lender for student loans without cosigner you will have dozens of options. The first thing you should pay attention to is the interest rate at which a private lender issues such loans. Naturally, the lower the interest rate, the usually more profitable the loan will be for you. Then pay attention to other conditions, term of the loan, additional fees and so on. Always read the contract carefully before signing it. Make sure you understand all the clauses of the contract, read all the footnotes and the small print where additional fees and payments can be covered.
Private lenders that offer student loans without cosigner
It is usually not easy to find student loans without cosigner, because lenders see such borrowers as highly risky. If you have a cosigner, then he will help you get a loan on better terms with lower interest rates. But if this is not possible, then consider the options for student loans without cosigner.
First, check the status of your credit, so that you can at least roughly understand what you can expect when applying for a loan. It is best to do this in advance for several months in order to have time and the opportunity to change the situation with your credit and credit history.
Then choose from the proposals of private lenders, based on their minimum requirements for borrowers. Here, for example, we will briefly list some private lenders who work with student loans without cosigner.
- Citizens Bank
Citizens Bank offers the opportunity to get student loans without cosigner for those who already have a good credit rating. Your income must be no less than $ 12,000 per year, and then you can apply for approval by student loans without cosigner. Your sponsor may be exempt from participating in the signing of your loan after 36 months of successful and timely repayment.
The private company FundingU specializes in lending to students without a cosigner. The company primarily considers your academic characteristics, such as academic performance, hours of internship and classes, and other things that do not have a credit rating or credit history, which students usually either have low or completely absent.
- Commercial Bank
Commercial Bank does not specialize in student loans without cosigner, but is willing to consider this possibility. On the other hand, having a guarantor will increase your chances of getting a loan approval. If you decide to take student loans with a cosigner, you will receive the best loan terms, and your cosigner may be exempted from participating in a loan after 12 monthly payments that will be made in a timely manner.
LendKey is a privately held company funded by local banks and credit unions. This allows them to offer their borrowers lower interest rates. You can apply for a loan through their website, which makes the process quick and convenient, but you must take into account that you must have a credit history of at least three years to get approval. LendKey also has its minimum student’s income requirements for approval without a cosigner.
- Ascent Independent loan
Ascent Independent is a loan that is intended primarily for junior or senior college students and graduate students who are independent. In addition, of course you will still have to qualify for compliance with certain requirements.
Sixup offers student loans, which generally do not require a credit history, but in some cases, depending on your particular circumstances, a cosigner may still be required.
Disadvantages student loans without cosigner
Find the opportunity to get student loans without cosigner as a whole is always there. You can apply for both the federal student program and apply to private lenders, but it is worth considering that student loans without cosigner have quite a few shortcomings. Despite the fact that federal loans are the best and most acceptable option, higher prices for education in the United States do not allow them to cover all costs that students have.
In addition to paying for the studying itself, students still need to spend money on rental housing, the way to college, food, and all the other living needs, while the study lasts. In recent years, students most often have to take additional student loans in order to cover all costs.
To do this, students often have to apply for loans from private lending companies, but they can also be difficult. Interest rates in private companies are always higher than those offered by federal student loan programs. The lack of a cosigner in any case always increases interest rates even more.
On the other hand, having received education, you will be able to get more financial opportunities and will be able to use refinancing and consolidation of your debts in order to quickly and cheaper pay off your student loan debt.
Application without the help of cosigner
To start, apply for a student loan without a cosigner for federal student assistance, called FAFSA. To be eligible to receive federal financial assistance without a guarantor, provide the FAFSA, which you can even file online.
If you decide to try to get student loans without cosigner, start looking for options where you can receive grants and scholarships. This will help you save quite a significant amount of money in the long run.
When starting a search for a private lender, you should take into account that you are faced with a choice of more than 100 lenders for student loans. It may not be easy to choose among such a number of offers, so you can contact our loan officers to get advice and get help in choosing the most suitable offer.