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If you already know that you’ll need to find a student loan without a cosigner to pay for college, fear not! There are plenty of options for you to consider, including a private student loan without a cosigner and federal student loans.
Continue reading to learn about which of these options require a cosigner and steps you can take to build your credit.
What Is a Cosigner?
A cosigner is someone who co-signs a student’s loan, often a parent, though it can be a mentor, friend, or relative. Being a cosigner is big responsibility, because he or she is equally responsible for making sure the loan is repaid and monthly bills are paid on time. A cosigner needs to have a credit history and a good credit score.
This is a big financial responsibility. As a result, sometimes it can be difficult to find someone willing to cosign for you.
What if You Can’t Find a Cosigner?
What if you do not have a parent or other adult who can cosign your loan? Fortunately, not all loans require a cosigner, and there are several avenues you can take to secure funds, including a loan from Ascent Student Loans.
Ascent Independent offers juniors, seniors, and graduate students private student loans without a cosigner. This provides more opportunities to qualify for a loan in your own name and has these benefits:
- Cover your tuition and eligible living expenses
- Fixed or Variable APR
- 1% Cash Back Graduation Reward
- No application fees
- Flexible repayment terms
- 0.25% interest rate reduction for payments made via automatic debit
This private student loan considers several factors which may include: loan product, other financial aid, creditworthiness, school, program, graduation date, major, cost of attendance and other factors. Ascent Independent may help you pay for college while also building credit in your own name.
Of course, there are various eligibility requirements, so be sure to check with Ascent. And, as it is with all lenders, decisions are based off your creditworthiness, school, program, graduation date, and other factors.
Establishing a Credit History and Good Credit Score
You may be able to take out a private loan without a cosigner if you have a good credit score and a credit history. Under the age of 21, there are two common ways you can begin building good credit:
1. Open a secured credit card
The Credit Card Act of 2009 made it difficult for anyone under 21 to get a credit card. While you technically can apply for a standard credit card once you’re 18, you have to show a steady income, which most young adults cannot do.
You can, however, open a secured credit card. This type of credit card requires you to make a deposit, which usually equals the spending limit. It thus technically operates more like a debit card, but it is considered a credit card and will help you to start building your credit history.
2. Become an authorized user on someone else’s credit card
You can become a user on someone else’s (usually your parent’s) credit card. You will get your own card with your name on it, but the person who originally created the account is the primary account holder and is ultimately responsible for making the payments to the lender.
Being an authorized user becomes part of your credit history, which is a good thing as long as you and the primary account holder use the card responsibly and pay bills on time.
Do Federal Student Loans Require a Cosigner?
Often, those who take out federal student loans do not need to have a cosigner for their loans. Some of these options include:
Stafford Federal Loans
A Stafford loan is a federal loan that does not require a cosigner. Stafford loans can be both subsidized and unsubsidized and allow first-year undergraduates to borrow up to $5,500.
A Perkins loan is a federal loan that does not require a cosigner. These loans are low interest loans for undergraduate and graduate students with exceptional financial need.
If Federal Loans Are Available, Why Take Out a Private Loan?
There are many differences between federal student loans and private loans. For instance, while federal student loans may offer benefits such as lower and fixed interest rates, there are several reasons why a student may need to take out a private loan to pay for college. Those include:
Federal loans may not cover your necessary costs
The average tuition costs for the 2017-2018 year were:
- Private college: $34,740
- Public university (out-of-state): $25,262
During the time it takes to earn an undergraduate degree, a dependent student may take out a maximum of $31,000 in federal student loans, and an independent student may take out a maximum of $57,500 in federal student loans.
Given this discrepancy, students may find themselves searching for other ways to bridge the gap, such as private loans.
Parents may refuse to fill out a FAFSA
While your parents do not need to be a cosigner in order for you to obtain a federal student loan, their information is needed on the Free Application for Student Financial Aid (FAFSA) and must be completed every year you attend school. Some parents refuse to file a FAFSA for reasons such as:
- Privacy concerns
- An estranged relationship with their child
- Tax return delinquency
- Fear that completing a FAFSA obligates them to pay for their college costs (it does not)
Find the Perfect Private Student Loan for You!
Don’t worry if you need to apply for a private student loan without a cosigner! There are many options, including Ascent Student Loans, that you may be approved for to help you pay for college.
Ascent Student Loans sponsors these blog posts, and writes, as well as works with partners, to create informational content that is of interest to prospective borrowers and our applicants.