Borrowing money is never easy, and student loans are especially tough. Students are generally busy with schoolwork, leaving little time to earn income. They also tend to be young, without much in the way of a credit history. As a result, most lenders will only offer a loan with a cosigner involved -- but that’s not always an option.
It may be possible to get student loans without a cosigner, but you should be prepared for some challenges.
The One Sure Thing
If you want to borrow on your own, start with government loan programs, where you can apply for several types of student loans without any cosigner required. For example, Stafford loans are easy to qualify for because you don’t need any credit history or income.
These loans are the closest thing you’ll find to a “sure thing.” The Department of Education makes it easy to get money, but there’s a hitch: you can’t borrow as much as you want. Government loan programs come with limits (a maximum amount you can borrow each term), and once you’ve reached the limit you’re out of luck. To use these loans, visit your school’s financial aid office.
Start with government programs and then move on to private lenders, if you must.
Private Student Loans
It is not easy to get a private student loan without a cosigner. If you’re among the few students who have a consistent income and established good credit, you’re lucky -- most don’t have either. It’s important to understand that borrowing on your own is difficult and most likely expensive.
Unfortunately, there are no easy answers as you go through this process. Advertisements may promise student loans with no cosigner, but they’re likely dead ends at best -- and scams at worst. The sooner you know this, the better.
If you’ve got some credit established you can always try to apply for a loan without a cosigner. However, be aware that lenders want to see a solid credit history along with the ability to repay a loan (in other words, a job with income). Without those things, they’re likely to turn you away. While it doesn’t hurt to ask once or twice, your credit scores can get dinged up if you repeatedly apply for loans.
Build Your Credit
This is not a quick solution (remember the part above about “no easy answers?”), but it may eventually allow you to qualify for a student loan without a cosigner. You might expect the process to take two years or more. However, if it’s the only option you’ve got and you’re willing to wait then it’s a good option.
Build up your credit history by borrowing responsibly. Even if you can’t borrow enough for school right now, you might be able to get a small loan or a credit card. If you work part-time and can deposit $500 or so at a credit union, ask about a “secured credit card,” which will certainly help your credit.
Use a Cosigner
Yes, it sounds crazy if you’re trying to get a student loan without a cosigner. But that might not be feasible, or it might be several years before you can pull it off -- and even then you won’t have fantastic credit. If you’ve tried everything else, consider asking somebody to cosign a student loan for you.
Of course, your cosigner should be willing and able to take the risk for you, but the risks might be smaller than you imagine. In addition, your involvement with the cosigner might be shorter than you’d expect. With some student loans, cosigners are temporary -- they’re removed from the loan after you make payments on it for a few years. This allows you to move on independently, and it allows your cosigner to step away from the risk of repaying your loan.
The things you own may be your key to loan, although you technically aren’t getting a “student loan.” If you own a car, for example, you can pledge the vehicle as collateral for a loan. You probably won’t get enough to fund an entire education, but it may help you get a few classes under your belt while you build credit. Collateral loans are generally expensive and risky, but they’re an option if you insist on borrowing on your own.