Private Student Loans Without A Cosigner
It’s a well-known fact that adding a cosigner to your loan is a great way of getting a reduced rate.
Most students have a limited credit history – or no credit history at all – so getting approved for a private loan can be challenging.
If you have parents that are willing to cosign a loan, everything is easier – but unfortunately, not everyone is in that position.
But don’t panic – there are plenty of lenders willing to give out private student loans without a cosigner.
Let’s have a look at the best ones out there and see what might be the right route for you to take.
8 Lenders Offering Private Student Loans Without A Cosigner
Here are the top 8 lenders offering student loans without a cosigner:
Best For: Those with poor credit history
Ascent offers a special non-cosigned loan option. Even for those with a poor credit history, you can achieve eligibility based on your predicted future income.
To help students get the loans they deserve, Ascent considers a wide variety of factors in lieu of credit history – school, program, graduation date, major, and cost of attendance.
The eligibility criteria you need to meet are fairly strict:
- Be a college junior, senior, or graduate student
- Be enrolled full-time in a program at an eligible institution
- Be a US citizen
- Have a GPA of 2.5 or greater and meet SAP requirements
However, the rates are amongst the lowest for non-cosigned private loans. There’s also an automatic payment discount of between 0.25% to 2.00%, depending on how high your original rate is.
- No application fees
- Choose fixed or adjustable rates
- Not suitable for international students or part-time students
- Minimum GPA requirement
Best For: Part-time students
Sallie Mae is amongst the most popular student loan lenders in the US. Their loans are best-suited for those with a co-signer, but it’s possible to get approved without one.
It may be easier to get approved elsewhere for a lot of people, but Sallie Mae is one of the most flexible lenders in terms of the groups they provide loans for – part-time students, master’s students, and even those undergoing career training are all eligible.
Variable rates are between 2.75% and 10.65%, while fixed rates are between 4.74% and 11.85%. Like most lenders, you receive a discount of 0.25% by enabling automatic payments.
There are also some extra perks to signing up for a loan with Sally Mae. For their undergraduate loans, you can get 4 months of study help on Chegg (an online tutoring site) for free.
Unfortunately, this isn’t available for master’s loans.
- Extra perks
- Offers master’s loans
- No origination fees
- Harder to get approved without a cosigner
Best For: Master’s loans
Citizens Bank is one of the biggest retail banks in the US and offers loans both with and without cosigners. However, to apply without a cosigner, you need to meet certain eligibility requirements, such as being a US citizen and having a good credit score. Even if you meet these criteria, not having a cosigner will stop you from being given the lowest rates.
Yet even the highest end of Citizens Bank interest rates are lower than most other providers – fixed-rate loans range from 4.72% to 12.04% APR, while variable rates range from 2.76% to 10.87%. If you use automatic payments, you can receive a discount of 0.50%.
A major advantage of using Citizens Bank is that you can obtain loans for Master’s programs as well as undergraduate degrees, which not all lenders offer. For master’s degrees, you can lend up to $110,000, which is slightly more than the $100,000 on offer for undergraduate programs.
- No application or origination fees
- Master’s loans available
- Both fixed-rate and adjustable-rate loans
- The lowest rates only achieved with cosigners
- International students need a cosigner
Best For: Those with good credit
Discover recommends applicants to apply with a creditworthy cosigner, but if you have a good credit score, you can still get approved without one.
Discover is a well-respected lender, with an A+ rating from the Better Business Bureau, and they offer loans with zero fees. If your credit score is good, they’re an option worth considering.
Variable rates range from just 2.80% to 11.37%, while fixed rates are between 4.74% and 12.74%. It’s a reasonably large range for student loans, but if you can fit in at the lower end of the range, you’ll get a good deal. You can loan up to the total amount of your course as long as the college is certified.
As an extra reward, if you earn a GPA of 3.0 or more, you’ll receive a onetime cash reward from Discover.
- Rewards for good grades
- Zero fees
- Must have a good credit score
- Not suitable for international students
Best For: International Students
One of the groups that most struggles to obtain a cosigner are international students – with their parents most likely living in another country, they’re not eligible to be cosigners.
Founded by a former international student, MPower solved this problem by focusing on the potential of students and reaching out to investors and foundations to give funds to students instead of banks. They also partner with schools to give their loans at a lower cost.
As well as removing the need for a cosigner, MPower also doesn’t require collateral or credit history – they use alternative ways to measure whether a borrower is likely to meet their payments. To give international students the full package of support, they even offer help with visa applications.
All their loans have fixed interest rates, ranging from 7.35% to 14.97% APR, including an origination fee of 5.00%. However, if you consistently make your payments and achieve academic success, you can receive a discount of up to 1.50%.
Naturally, that means home students aren’t eligible for MPower Financing, but there are plenty of options out there for you.
- Use alternative ways of assessing credit history
- No collateral required
- Offer free visa support letters
- For international students only
- High interest rate
Best For: Students with good career potential
Funding University, otherwise known as Funding U, specializes in loans without cosigners – they don’t even offer loans with cosigners. Their loans are unsuitable for international students as only US citizens can apply, and must be used only for bachelor’s degrees at not-for-profit schools.
Like MPower, all their loans are fixed interest. You can borrow between $3,000 and $10,000 every school year, at an APR of 7.99% to 13.49%. By enabling automatic payments, you can receive a discount of 0.5%.
Instead of evaluating whether to accept you based on your credit history, Funding U focuses on your future potential by looking at factors like academic achievement, job experience, and future earnings.
It takes just a few minutes to receive your pre-approval, and afterward, you’ll be assigned a loan officer to guide you through the process, including options for repayment and your future plans.
- All loans offered without a cosigner
- Receive pre-approval in minutes
- US citizens only
- Undergraduate degrees only
Best For: Medical students
CommonBond was built with the aim of being a less confusing and more helpful lender. They offer undergraduate, graduate, MBA, dental, and medical loans, but most of these groups need a cosigner. The exception is medical loans, making CommonBond the obvious choice for budding doctors.
Because of the huge earning potential, CommonBond is able to offer relatively low interest rates too. Fixed-rate loans range between 5.56% to 6.76%, while variable rate loans range from 5.21% to 6.39%.
There are also some features to add extra flexibility – monthly repayments can go as low as $100 to account for essential parts of medical school like internships and fellowships.
There’s also the chance to pause payments completely for as long as 12 months with no consequences.
- Flexible repayments
- Most loans require a cosigner
Best For: Low-income students
Sixup was set up to help low-income students who often need additional financial resources on top of scholarships and federal funding. They recognize that many people from unprivileged backgrounds lack access to a cosigner with a good credit history and believe those people should still have the same access to education.
As well as financial support, Sixup provides help with other areas of life. Once accepted, you can receive free workshops, tutoring, resume support, and more.
To be eligible, you need a GPA of 3.0 or higher. Although no credit history is needed, if you do have a credit history, then you need a score of at least 600.
Currently, Sixup is only available for people who are residents of the following states: Arkansas, California, Colorado, Connecticut, District of Columbia, Florida, Georgia, Massachusetts, Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Oregon, Texas, Virginia, West Virginia, or Wisconsin.
- Provide additional support
- No credit history required
- Not available in all states
- GPA requirements
How Do Cosigners Work?
A cosigner is someone who signs a loan with you, agreeing to pay your loan for you if you miss the payments. Most students have a poor or non-existent credit history, making them a huge risk for lenders. Having a cosigner with a solid credit history provides extra assurance to the loan provider that you won’t default.
Most students use their parents as their cosigners, but it doesn’t have to be this way. You can use any adult with a good credit score that wants to help you out and see you graduate.
Understandably, most people will be reluctant to cosign your loan unless they know you very well and can trust you – nobody wants to be trapped into paying a huge student loan debt.
There are also some websites online claiming to connect students with cosigners, but these are more likely to be scammers preying on desperate students with limited options, so it’s best to stay away.
How Can I Get Approved For a Student Loan Without A Cosigner?
To apply for a private loan without a cosigner, you’ll still need to fill in the FAFSA – most colleges require it, and you’ll most likely be applying for federal aid as well as private loans.
The private loan will then require a separate application, where you’ll need to provide information about your education, financial history, and what you need the loan for.
To get the best rates possible, a top tip is to compare the rates of different lenders. A website like LendKey is a great first step in this and can save you a lot of money in the long run.
Borrow Less Money
The less you borrow from a lender, the less of a risk you are to them. Even if you default on a loan, it will be less of a blow to the company if you didn’t owe them much money.
Of course, if you need a certain amount of money to get through college, it’s difficult to compromise. But, once you’ve exhausted all your options with federal loans and scholarships, try to pay for what you can with a part-time job to lower your debt amount.
Improve Your Credit Score
It’s possible to get approved for a private loan without a cosigner and a poor credit score, but the rate charged will almost certainly be higher.
If you’re planning on heading to college in a few months, you won’t have much time to build up your credit, but if you still have a while before you start, then building credit should be a priority.
See if anyone in your family is willing to add you on to their credit card, as this is the easiest way to build your credit score from a young age. Alternatively, see if you can apply for a student credit card or a beginner credit card.
Boost Your Earnings and Job Potential
We’d all like to increase our chances of having a great job with a good salary. Lenders like that too – some loan providers examine factors related to earning potential instead of cosigners or credit history, so if you know you won’t have a cosigner, boosting your career prospects could be your best shot.
Of course, it’s not quite that simple, or everyone would be earning a six-figure salary. But making sure you choose a subject with a good return on investment and looking for extra work experience where possible are both great ways of showing your commitment to employability and therefore paying off your loans.
Alternatives to Student Loans with No Cosigner
Federal Student Loans
The obvious alternative to private loans is a federal student loan, which often come with more favorable terms and are eligible for forgiveness programs, making them slightly less of a risk and a gamble. They also offer deferred payment options.
There are two kinds of federal loans: direct subsidized loans, direct unsubsidized loans, and PLUS loans. Direct subsidized loans are for undergraduate students and are given out depending on the need of the students – those with the least ability to pay their fees receive the most. The interest rate is currently 4.53%, which is lower than most private loans without a cosigner.
Direct unsubsidized loans are available for any student, regardless of their financial situation. The interest rate is the same, but because the loan is unsubsidized, students must pay interest accrued while in school and deferment – by contrast, the government pays the interest during these periods for subsidized loans.
Finally, PLUS loans are for parents of students and graduate students. They have much higher interest rates – currently 7.08% – but this is still competitive compared to private loans.
Unfortunately, the reality is that federal loans don’t cover everyone – which is probably why you’re thinking of getting a private loan anyway. The maximum you can borrow over your entire degree is $31,000 in direct loans, of which $23,000 can be subsidized. Although this is a significant amount of money, many people need to borrow more. Luckily, there are other ways to finance your degree.
Scholarships and Grants
However, there are other private scholarships that require separate applications – you might need to include an essay, transcript, or letter of recommendation too.
There are a few different types of scholarships – some are based on athletic or academic abilities, others on financial need, or a mix of both.
It can be time-consuming to start researching scholarships, but here are some ideas of where to start:
- The website of your future college
- Local organizations or charities
- High school counselor
- Organizations connected to your gender, nationality, major, religion, or background
Save More Money
It might sound patronizing, but saving money before you start college is the best way to lower your reliance on loans.
As great as going to college straight after graduating high school might sound, it’s a choice you might live to regret if you need to take out a private loan and can’t find a cosigner.
Taking a gap year to work and save up funds isn’t the end of the world. Doing this is also a great opportunity to think further about what you want to major in and your goals for your future career, leading to more success in the long run as well as less debt.
Private vs. Federal Student Loans
Let’s talk a little about the difference between federal and private student loans. While federal student loans are provided by the US Department of Education, private lenders provide private loans, like credit unions and banks.
Because they’re provided by lenders, the interest rates may be fixed or variable, and credit history is generally assessed to determine eligibility.
The loans can be used for any expenses related to your education – not just tuition but also accommodations, books, and more.
Federal student loans are generally preferable since they’re easier to obtain and make you eligible for other perks like loan forgiveness plans.
To apply, you must complete a Free Application for Federal Student Aid (FAFSA). International students aren’t eligible to apply.
Some people use federal loans, scholarships, and grants to pay for everything possible, then use a private student loan to cover the remainder of the costs.
Because private student loan lenders decide whether to give out a loan based on the riskiness of a borrower rather than their eligibility for federal aid, the two biggest factors that determine your likelihood of acceptance are your credit history and whether you have a cosigner.
Most students don’t have a good credit score due to their young age, so for many, cosigners are a necessity. Without one, private loans can seem like a daunting or even impossible mission.
Does Sallie Mae require a cosigner?
Sallie Mae is amongst the lenders that don’t require a cosigner for their private loans. However, they recommend applicants to have one if possible, as this can lower rates and boost chances of approval.
Can I get a Discover student loan without a cosigner?
Like Sallie Mae, Discover offers student loans that don’t require a cosigner, but you’ll need a good credit score to stand a decent chance of approval. Generally, this means having a credit score of 620 or higher.
Could I choose a fixed or variable interest rate?
Adjustable-rate loans can be tempting since they may have a low rate to start with, but ultimately a fixed rate is the safest bet. Taking out a loan knowing the interest rate could shoot up at any point is a risky move and could stop you from being able to meet your payments.
Should I Get A Student Loan Without A Cosigner?
Even though you’ve now seen it’s possible to get a private student loan without a cosigner, you might be doubting whether it’s really a good idea. As you’ve seen, rates can be high without a cosigner, and without a credit history, you might not even get approved.
This shouldn’t necessarily put you off going to college, but it’s definitely a reason to evaluate the decision carefully. A lot of people end up pursuing further education for vague reasons such as ‘having the experience,’ but if you’re in a position where you’re struggling with financing, you might need to think things through more.
If your college and degree will give you a high chance of landing a high-paying job, going forward with a loan without a cosigner isn’t such a big deal.
However, if your degree isn’t statistically likely to give you enough money to pay it off comfortably, taking one out is a risky choice. But, before you give up the idea of college altogether, you might want to consider some alternatives to private loans with no consigner.