Are Student Loans Without Cosigner A Possibility?
Cosigning a student loan is often a difficult decision that most parent in the US will have to make at some point. Lenders make it difficult for students who have little to no credit history to access loans, and the fact that they need parents to cosign these loans makes the situation even more difficult. Cosigning gives the lender security because with a nil credit history, and with a looming risk of default in this economy, a student’s credit rating even after graduation will just not be good enough.
So, are there loans that don’t require a cosigner? Sure. Federal aid is a sure way to get credit without the need of a guarantor. Student college loans without cosigner present a great opportunity to get federal money with low interest. How does one apply for or qualify for these government loans?
Tips on How to Get Student Loans without a Cosigner
How to take out federal student loans; this is one of the most important questions college students in the US will ask themselves. There are about 12 million students taking out loans to fund their education, with about a tenth of this number using private loans to finance their education. The debt ceiling is beyond a trillion dollars, and a good number of current and former students and their parents are weighed down by student loans and interests. Private lenders won’t care much about the inability of a student to pay if they listed a co-signer on their application forms. With this in mind, taking out a private loan should always be the last resort.
The question then becomes how easy is it to get student loans without private financing and without a cosigner? Federal financing including grants, scholarships, and other loans should always be the first resort as this is free money being channeled by the government towards education. All students are eligible for a federal loan, and the best part is that they don’t need a cosigner. Of course, the government’s ‘modus operandi’ is that parents should be setting aside a certain portion of their incomes to go towards paying for their children’s education. Federal loans will therefore never be able, in totality, to cover all your tuition, living and accommodation expenses.
“Do I need a cosigner for student loans?” Not for a federal loan you don’t
Here Are the Best Student Loans without Cosigner
Once you’ve made the decision to take out a federal loan, here’s a good place to start familiarizing yourself with easy student loans to get:
- PLUS Loans
This is financial aid offered to undergraduate, graduate and professional students spending at least 50 % of the time in eligible post-secondary and college institutions. They don’t need a co-signer, and they are not awarded on the basis of one’s creditworthiness, although the person applying for these should not have a poor credit history. Although the interest levied on these loans are significantly higher than other federal loans (at 7%), they are still much lower than private loan options.
- PERKINS Loans
These are need-based loans which are offered to students who can clearly demonstrate a financial need and who are enrolled at a post-secondary institution. Perkins loans are not offered by every school, and therefore you should consult with your potential institution to find out if they do offer these loans.
- STAFFORD Loans
There are two types of Stafford loans, available to both undergraduates and graduates. Subsidized Stafford loans are advantageous because they offer subsidized interest, which means the government carries the cost of extra interest and any accruals arising from deferment. They are need-based, however, which means students must demonstrate a clear need for the aid.
Unsubsidized Stafford Loans are not need-based, which implies that any student who fills out the FAFSA is eligible for the loan. Being unsubsidized, however, means that students will be responsible for paying for any accruals arising from the period they are in school and any deferments that arise. Currently, the interest rate for Stafford loans stands at 4045% for undergraduates and 6% for graduates.
Federal loans form the bulk of college loans without a cosigner. However, there are private lenders who are willing to dive deep into the crux and provide loans without a cosigner. The interest rates on these are extremely high, and unless you have a steady and regular income, you are not advised to go for these types of loans. The other criteria they will look at include being a US citizen and having a good credit history. As mentioned before, most students don’t have any credit history, so this option naturally phases out for most students.
Getting student loans without a cosigner can be difficult, and most institutions hate this option because it adds risk to their balance sheets. Some of the institutions that provide private student loans without cosigner and no credit include Citizen’s Bank, Sallie Mae, U-fi, and Discover. These services offer fast student loans without cosigner although their interest rates go above 10%. Getting a student loan without a cosigner works on the assumption that you will get a well-paying job right after graduation, which is rarely the case.
Quick student loans with no cosigner have major disadvantages, a major one being the interest rates that are levied on students years after graduation. If in any case of default, your tax refunds might be garnished and the accruals might weigh you down years after graduation. Federal loans are easy student loans to get, and they start with filling out the FAFSA online. Before looking to private debt, exhaust all federal means available including grants, scholarships, and low-interest loans. Private debt locks you down for years unending.