Getting the Best Student Loans Without a Cosigner 2020

Getting the Best Student Loans Without a Cosigner 2020.

Student Loans Without a Cosigner: Getting the best student loans is a rite of passage for many college-bound students. Navigating the different types of loans available can be tricky, especially for students who are applying for student loans without a cosigner.

Getting the Best Student Loans Without a Cosigner

College expenses accumulate quickly, so there is a good chance you will require some help paying for your education.  Maybe mom and dad are chipping in, but tuition, books, housing, and other related expenses might tax their generosity.

Independent loans are available for your education, but to qualify, you’ll need to demonstrate a solid credit history. Your creditworthiness is gauged by your overall “credit score.” Simply put, a number is assigned to you based on the results of every credit interaction you have ever had.

If your credit behavior has been responsible and reflects a long history of paying your bills on time, the number will be high. For every negative credit entry, like a late payment or loan default, your score goes down. Credit performance is also judged using criteria like diversity and duration, which can be problematic for young people.

Funding Your Education Without Co-signer – Best Loans

College funding is available for students with little or no credit.  A cosigner increases your access to conventional loans, but there are other forms of financial aid that you can seek without help.  Federally funded loans provide the greatest access to college aid, for students without cosigners.

♦ Ascent

Ascent is one of the only lenders that offer student loans specifically for those without a co-signer and little credit history. The independent student loan is only available to junior and senior undergraduate students, as they are closer to graduation with more information available on their financial futures. Instead of focusing on credit history, the lender looks at a student’s financial future based on their school attendance, earning potential by major and savings.

Although Ascent can be a good option for borrowers without a co-signer, the company’s student loans have significantly higher APRs than other lenders, and you will definitely get a much better rate with a co-signer. In order to qualify, you must have at least a 2.5 GPA and you must not have any delinquencies of 60 or more days during the past two years.

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♦ College Ave

College Ave offers borrowers multiple student loan options with low variable rates and flexible repayment plans. The lender does not disclose its credit requirements, but it offers a free credit prequalification tool for you to see if you qualify without impacting your credit score. The student loan company will cover up to 100% of your school costs and gives you four different loan terms to choose from with no prepayment penalty.

Students that may struggle to pay off their loans should not apply to College Ave. Unlike most lenders, College Ave doesn’t have a specific policy in place for those who cannot meet the payments to repay their loans. Therefore, we don’t recommend the lender for borrowers that may struggle financially, as there is no guarantee of qualifying for forbearance with the lender.

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♦ Discover

Discover stands out for students without a co-signer as it offers generous repayment assistance options and a 1% cash reward for the student with at least a 3.0 GPA. The repayment assistance Discover offers gives borrowers reassurance that there are options in case they face financial troubles. The company helps them avoid forbearance with early repayment assistance, payment extensions, and reduced payments for borrowers behind on their bills.

On the other hand, Discover’s rates are quite high compared to other lenders, like College Ave, and although the lender doesn’t have a specific credit score requirement, Discover’s annual report stated that the average application had a credit score of 722. Also, your school must have an existing relationship with Discover to be eligible for a loan, which you can check by contacting the lender.

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Other Student Lenders to Consider If You Have No Co-Signer

We recommend that you apply to as many lenders as you can to make sure that you’re getting the best rate possible. Below, we have included other lenders that don’t require a co-signer, although most encourage students to use one.

These student loan companies could also be an option for borrowers with potential co-signers that will apply as long as they can be released from the loan at some point. All of these lenders offer co-signer release after a certain number of consecutive on-time monthly payments.

Lender Fixed APR Variable APR Co-signer Release
Sallie Mae 5.49% – 11.85% 4.25% – 11.35% After 12 monthly payments
Citizens Bank 5.25% – 12.09% 4.47% – 12.34% After 36 monthly payments
SunTrust Bank 5.349% – 14.050% 4.249% – 13.250% After 36 monthly payments
Wells Fargo 5.94% – 11.26% 5.04% – 10.93% After 36 monthly payments
PNC Bank 5.61% – 11.79% 5.15% – 11.30% After 48 monthly payments

Benefits of Student Loans Without a Cosigner

One of the main benefits of getting your own student loan is the opportunity to build your credit. Establishing a positive credit history early on can help you obtain loans later in life. In addition, without a cosigner, you’re the sole party responsible for the loan. No one else is on the hook if you fail to make your payments.

Additionally, because it can be challenging to qualify for private student loans if you don’t have a cosigner, you might start by applying for federal loans. Federal loans offer increased payment flexibility, payment assistance options, and low-interest rates that make them an attractive alternative to private loans.

The Demerit of Student Loans Without a Cosigner

Federal loans limit the amount of money that you can borrow every year. Private educational loans let you borrow as much as you need to pay for college and your living expenses. Because most private lenders have strict credit requirements, it’s difficult to qualify for these loans without a cosigner. Even if you do, you may pay higher interest rates, which costs you more over the life of the loan.

Getting a Student Loan Without a Co-signer

Getting a Student Loan Without a Co-signer

The best way to get a student loan without a co-signer is to improve or build your credit history. This could mean paying down your debt balances or applying for a new credit card or loan. To start, you’ll have to look back at your credit history and examine any late payments or bills to see if the information is accurate. If not, you can dispute those records and request certain items to be taken off your report.

After cleaning up your history, you should start paying down your balances to reduce the amount you owe compared to how much credit you have, known as credit utilization. Ideally, you want to keep your credit utilization below 30%. On the other hand, if you lack credit history, you can build your credit score by applying for a student or secured credit card, becoming an authorized user on a family member’s account, or getting a credit-builder loan.

You can even combine these options to create greater diversity on your credit portfolio and improve your overall credit score. Be sure to meet monthly payments and keep your credit utilization below 30%, or else your credit score won’t improve and may even lower.

Alternative Ways You Can Recover from Losing Your Cosigner

Here are six ways you can continue paying for college even if your student loan cosigner is no longer on board.

1. Fill out the FAFSA

You might have leaned on private student loans to cover college costs. The most important thing to do now is to complete the Free Application for Federal Student Aid (FAFSA).

Without the FAFSA, you close the door on federal grants, work-study opportunities, and loans. Those options could come in handy as you overcome the loss of your cosigner.

2. Search for scholarships

You might think scholarships are reserved for high school seniors, but that’s just one of the most common myths about scholarships. There are plenty of scholarships for college students. Prioritize applications that are meant for students of your experience level and field of study.

I won $11,000 worth of scholarships while I was attending college. I secured them because I was earning my degree in journalism while I applied for them. Here are the four sources where I found scholarship opportunities:

  • My school’s financial aid office

  • My on-campus employer

  • Writing contests

  • National foundations

Think about how your major area of study or minor in-school accomplishments might help you score scholarships.

Read More:

3. Trim your education costs

Before you consider borrowing more money without a cosigner on board, try to trim academic costs. That might offset your need for a student loan without cosigner support.

Drastic measures include transferring to a more affordable school or taking time off to save for your cost of attendance. But there also are small ways to save, such as:

Despite adopting these measures, you might still need to take out student loans without cosigner support. But you’ll at least be able to lower your potential debt.

4. Reconsider your federal loan options

If you previously relied on private student loans for college, you probably had a good reason. Maybe you scored a significantly lower interest rate with a private lender, thanks to your former cosigner.

But now that you’re considering student loans without cosigner requirements, there’s no better place to look than the federal government. Direct Subsidized Loans and Direct Unsubsidized Loans for undergraduates don’t require a cosigner. You borrow the loans in your name and it’s your sole responsibility to repay them.

Federal student loans come with features a private lender likely can’t match. For example, you can switch your repayment plan for a federal loan to income-driven repayment (IDR) plan, which limits your monthly payments to a percentage of your income, after you leave school.

5. Find a new cosigner for private loans

Perhaps you worked with a private lender in the past because you maxed out your federal student loan allotment and needed to fill in the gaps.

Whatever the case, understand that you could find a new cosigner to replace your old one. If your mom or dad cosigned your previous loan, you might consider other cosigner candidates. A grandparent or other relative could stand in this time around.

But your cosigner doesn’t have to be a family member — they could be a friend. Many private student loan companies only require your cosigner to be creditworthy and have a positive debt-to-income ratio. Ask your lender about its specific criteria before putting your next cosigner through the application process.

6. Consider student loans without cosigner support

consider student loans without cosigner support

If a private lender is best for your situation, be aware that it’s possible to take out student loans without cosigner support as an undergraduate. Over 92% of undergraduate private student loans had a cosigner in the 2017-2018 academic year to date, according to a report from MeasureOne. That number is high because most college students don’t have the credit history and regular income to qualify for private student loans on their own.

You could be in the 7% minority, however. Not all lenders require undergraduate borrowers to have a cosigner. If you have a credit score near or above 700 and earn a regular paycheck, you could earn a private loan approval.

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