How to Find a Student Loan Without a Cosigner

Reviewed: August 02, 2015
By FinanceWeb

Borrowing money is always complex and difficult, particularly when it comes to student loans. Most college students are concentrating on their classes and have (at best) a low-paying part-time job. Since they’re are young, they usually don’t have much of a credit history. For this reason, people wanting student loans often find that private lenders insist on a cosigner. If you don’t have someone to cosign your loan, then you have to consider other options.

The Easiest Approach

The easiest way to get a student loan is the government student loan program. You can apply for several types of student loans without the necessity of having a cosigner. For instance, almost anyone (regardless of income or credit) can qualify for a Stafford Loan. These federal loans are virtually guaranteed approval.

However, while the government makes it easy for you to get money, you can’t borrow any amount you like. Provided by the Department of Education, these loan programs place limits on how much you can borrow. Once you butt against that limit, that’s it. If you’re interested in these loans, contact your college’s financial aid office. There’s a good deal of paperwork to fill out, and they can walk you through it.

Private Student Loans

If you’ve reached your loan limit with the Department of Education or for some other reason want to try a different approach, you can consider turning to private lenders. But if you don’t have a cosigner, it’s not an easy task to get a private student loan. If you’re one of a handful of college students who not only have a good credit score but also a good income, it’s a different story. But if you’re like most college students and have neither of those, getting a loan is likely going to be both difficult and (if approved) expensive.

Keep in mind that lenders are going to want evidence that you will have the ability to repay the loan, meaning that you will have a good job with sufficient income to make the payments. You’ll also have to have a solid credit history. If what little credit history you have reveals late payments and other problems, you can pretty much forget about a private loan. It’s also important to know that applying for loans over and over again at different banks can actually damage your credit scores.

Improve Your Credit

One approach you can take if you don’t need student loans quickly is to try to improve your credit score. Unfortunately, this could take some time and effort on your part. Still, if you can do this, it can provide you with a means to get a private student loan without having a cosigner. This process is likely to take at least a couple of years. But it can work if you have the time and are patient.

Responsible borrowing is one of the best ways to build your credit history. If you are not able to borrow what you need for school right away, try to get a credit card or a small loan. Make sure that your payments are always on time and in full. If you have a part-time job, deposit a few hundred dollars in a credit union and ask them about getting a secured credit card. All of these things can help you establish good credit so you can try to get a student loan later.

Provide Collateral

Technically speaking, providing collateral for a loan isn’t exactly getting a “student loan.” Still, if you get the money you need that may not matter. If you have a car or other valuable asset that you can offer as collateral for a loan, it can partly solve your educational funding problem (at least for the short-term). However, loans based on collateral are usually risky and expensive. You’ll probably end up paying a lot more in interest than you would with other loans.