The question of how to get a student loan without a cosigner is quite common, given that there are many individuals who have bad credit or no credit history. The simplest solution for a student who has problematic credit and no cosigner to help, is to start with federal student loans. Most federal student loans are not based on a students credit, and will not require the student to pass any type of credit check in order to become eligible for these type of loans (federal PLUS loans will require the borrower to pass a credit check). Since most federal student loans are not based upon the borrowers credit, but rather on the borrowers financial need, a cosigner will never be needed to qualify for federal student loans. Where federal student loans can become problematic for borrowers with poor credit profiles, is when they do not cover the full cost of their college expenses.
Can I Get Private Student Loans Without A Cosigner?
After federal student loans have been exhausted, the most logical place for students to turn to next, is to private student loans. However, with private loans the borrower must have a good credit history to qualify, since private loans are largely based on credit and not on financial need. There are no private student loans on the market which do not require a credit check as part of their application process. Private lenders, banks, and other lending institutions all use a borrowers credit profile as a way to calculate the risk associated with lending money to that particular individual. If a borrower has a poor credit profile, they will likely need a cosigner to secure a private student loan.
Why Do I Need A Cosigner?
For borrowers with poor credit, obtaining a creditworthy cosigner such as a parent or legal guardian will greatly improve your chances at securing a loan, and it may even improve the interest rate that you will qualify for. Why a creditworthy cosigner is important to those with bad credit, is because the lender will factor in the cosigners credit profile when determining its lending risk. If the cosigner has excellent and well established credit, and is willing to cosign on the loan, the lender will likely view this situation as a lesser risk, and therefore be more likely to extend the loan to you. It is important for cosigners to understand that by cosigning on a loan, you are agreeing to be held responsible for paying back the loan, should the individual you cosigned for stop making payments.
What If I Have No Credit Worthy Cosigner?
Many students who are unsuccessful at securing a private student loan on their own, also have no cosigner to help. Unfortunately, there is typically no way around getting a private student loan if you have problematic credit without the help of a creditworthy cosigner. For students who are in need of more money for college and are unable to obtain private student loans:
1. You may need to revisit your scholarship, work-study, and/or employment options as a means to help fund your college education.
2. Over the past few years some peer-to-peer lending sites have also gained notoriety. It may be worth looking into the qualifications for a peer-to-peer student loan, for those who are willing to try something a little less conventional.
3. Students are also encouraged to speak with their schools financial aid office. It can sometimes be beneficial to speak with the financial aid staff at your school and explain to them your situation. They may have the ability to make you eligible for increased unsubsidized Stafford loan limits, or may have certain work study programs available to help provide you with some additional funds.
4. Your school or college may also have special payment programs that are available specifically to their students.