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Get a Loan Without a Cosigner

When You Can't Qualify for Loans Without Cosigners


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When you need money and you can’t get anybody to vouch for you, you’ll have to get a loan without a cosigner. This means you’re the only one responsible for the loan, and you have to convince the bank you’re good for the money. Figure out what lenders want so you can get loans without cosigners.

Cosigning Basics

Sometimes it’s impossible to get loans without cosigners. If a lender doesn’t believe you’ll repay the loan, they want to make sure somebody else will. Cosigners agree to make payments if you fail to -- they’re on the hook for the debt just like you. Borrowing and lending is risky for everybody.

Can’t Get a Loan Without a Cosigner?

If you’ve been told that you can’t get a loan without a cosigner, the lender is telling you there’s an issue. It may be that your credit is damaged or nonexistent. If you’re just getting started borrowing, you’ll have to build credit so you can get loans without any cosigner. Borrow responsibly and your credit scores will rise over time.

You may also be borrowing more than the lender thinks you can repay. With large sums of money, like home mortgages, it’s difficult to qualify for the loan without a cosigner. Lenders know how much your monthly payment will be, and they’ll compare that against your income (see Debt to Income Ratios). If the monthly payment eats up too much of your income they know trouble will follow.

Student Loans Without Cosigners

If you’re a student, it may be possible to get certain loans without a cosigner. Stafford loans in particular may be attractive. They’re available for full-time, part-time, graduate, and undergraduate students. Your credit is not an issue so you can get these loans without a cosigner. Federal student loans have other benefits as well, so be sure to talk with your financial aid office before borrowing elsewhere.

What’s on the Line?

Lenders demand cosigners because they want to reduce risk. They want a backup plan in case you stop repaying. However, a cosigner is not the only option. You may also be able to pledge collateral (promise to hand over an asset if you default on the loan) and get the loan without a cosigner. By putting some of your own skin in the game, lenders know you’ve got more incentive to repay as agreed.

Using collateral may not always be an option. Lenders may not be interested in your assets, or the lender you want to work with may not work that way. However, small business lenders often take collateral into account, so you can keep your friends and family out of the picture -- they don’t need to cosign for you. Some lenders are eager to lend against collateral, but the more desperate you are the more careful you have to be with these lenders.

Peer to Peer Loans

If you haven’t had any luck at traditional banks and credit unions, peer to peer lenders still might offer a loan without a cosigner. These lenders are sometimes more flexible about credit, although they’re still interested in your ability to repay. It’s worth making a request to see if your loan gets funded.

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