How to Apply For Student Loans without Cosigner

Millions of students every year decide to attend college or university and prefer to choose student loans as primary funding options. There are federal and alternative student loans with list of certain features available for borrowers. However in most cases students have no high-income level and no cosigner. Is it possible to qualify for a loan in this case? The answer is simple: yes and no.

There are federal and private student loans. It's important to understand that federal loans are offered for students with financial need. The good news is that they do not require cosigner or good credit score. What does it mean? It means that students with bad credit history and even without cosigner can still qualify and receive funding they need. But there are some weak sides. First, not all students will be approved. The reason for it is that these loans are offered for students with low income who have no financial opportunity to pay for education themselves. The second disadvantage is that typically the number of students awarded is limited. The main advantage is that there are several types of federal loans (Stafford, Perkins, PLUS) and some of them are open for all students. The most popular loan is subsidized Stafford loan.

The subsidized Stafford loan can be received by almost any borrower regardless of financial need. This type of student aid offer low rates, good repayment plans and other features to be taken into consideration. Stafford loans are provided by the U.S. Department of Education directly and no third-party lenders involved. It's good for borrowers and has strong benefits.

Private student loans

But what if the federal funding is not enough to cover all tuition expenses and you need to apply for private education loans. Is it possible to qualify for a loan without cosigner? The truth is it's very difficult. In practice, most of the students who apply without a credit-worthy cosigner are rejected and do not receive funding from the banks.

If you want to apply for a private loan - you have to have a cosigner. Moreover, your cosigner must be credit-worthy. It's a must. By creditworthiness banks mean that you cosigner has to have high level of income and good credit score. If these requirements are not met, the application will be denied.

The truth is to be approved you need a cosigner who will be responsible for you. Applying with a cosigner has advantages. First, it is possible to lower rates. If you apply with a good cosigner you can ask to lower rates. This practice is very well-known and takes place in almost every financial institution. The second major advantage is that you have a chance to establish you won credit history. It will be huge advantage for future lending activity. After the graduation you can apply for another loan easily and will be approved definitely.

Summing up, student loans without cosigner still exist. These loans are federal loans because they can be applied without a cosigner and a credit history. However it's almost impossible to receive private student loans if you have no cosigner. The best strategy is to apply for federal loans first.