How to Get a Student Loan Without a Co-signer

Look to the government first

Couple examining loan documents
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Borrowing money is never easy, but it's especially difficult for students to get approved for loans. Students tend to be young and without much—if anything—in the way of credit histories.

For that reason, some lenders will only grant you a student loan if you have a co-signer, which is a person who agrees to repay the loan on your behalf if you can't do so. If there's no co-signer available or you don't want to give that responsibility to someone else, it's possible to get a student loan without a co-signer. Understand how to get a student loan without a co-signer to maximize your chances of loan approval.

Get a Federal Student Loan Without a Co-signer

If you need to get a loan without financial backing from someone else, there's only one sure bet: federal student loans funded by the U.S. government. Students can get federal loans through one of several loan programs that the government administers. With the exception of PLUS loans, federal student loans don't require a credit check or a co-signer to get approved.

Direct Subsidized and Direct Unsubsidized loans, also known as Stafford Loans, are available for students who can and can't demonstrate financial need, respectively. Perkins loans are another option, but these are reserved for borrowers with the greatest financial need.

What's more, federal loans come with interest rates that are relatively low or even fixed for the life of the loan. If you qualify for a subsidized loan, the government will pay your loan interest while you’re still in school on a half-time basis. You might be able to use a flexible repayment program like income-based repayment after graduation. If you meet certain criteria, the government may even forgive or cancel a portion of your loan if you get a job in public service.

You'll need to complete a Free Application for Federal Student Aid to apply for a federal student loan. But as advantageous and easy as it is to get money for school from the government, federal loans come with limits, both in terms of the maximum you can borrow each year and in total at school as well as how much can be subsidized or unsubsidized. Consider moving on to private lenders if you need more than you can get from federal loans.

Get a Private Student Loan Without a Co-signer

Private lenders include banks, credit unions, schools, and other organizations that provide funding to students. They'll assess your credit, and if you have poor or no credit, often require a co-signer.

Getting a private student loan without a co-signer is more difficult, but if you’re among the few students with a consistent income and an established credit history, you might be able to apply on your own and get approved. Advertisements might promise easy approval, but they’re likely dead-ends at best and scams at worst. 

You can always try to apply for a loan without a co-signer if you have some credit established, but lenders may turn you away if you don't have a strong borrowing profile.

Getting a private student loan requires you to apply through your chosen lender. Going this route allows you to supplement the funding you get from a federal loan, but these loans come with some drawbacks. Namely, they may come with variable (and in some cases, higher) interest rates. Moreover, private student loans are often unsubsidized, so you won't get help from the lender with interest costs. Repayment plans vary by the private lender, but you'll typically have fewer options, especially when it comes to loan forgiveness.

Your credit scores can drop if you repeatedly apply for loans over an extended period of time.

Build Your Credit to Skip the Co-signer

If you want to get a loan without a co-signer, the alternative is to qualify for a loan based on your own credit. If, like many students, you lack sufficient credit, this will require building your credit. Granted, this isn't a quick solution and might not be feasible if you plan to start school in the current year. But eventually, with a solid credit history, you should be able to qualify for loans on your own.

Your credit score reflects various aspects of your borrowing history, including how regularly you pay bills on time, how much debt you have, and how long you've used credit. To bolster your credit score, start borrowing and repaying responsibly. Even if you can’t borrow enough for school right now, you might be able to get a credit card for students with a low limit and low interest charges to establish credit.

Get a Secured Loan

Your possessions might be the key to paying for school, although this technically wouldn't be a student loan. Student loans are generally unsecured loans, meaning there's no collateral or property securing the loan for the lender to seize if you fail to repay the loan. The lender will make a choice based on your creditworthiness or that of your co-signer.

However, if you prefer to get a loan without a co-signer, you may be able to get a secured loan backed by collateral and use the loan proceeds for your educational expenses. For example, you can use a home equity loan to cover tuition or other needs. Bear in mind: Your home is the collateral for a home equity loan, so you could lose your home if you default on payments and the lender forecloses on your home to recoup the loan proceeds.

Home equity loans and other collateral loans pose a high degree of risk (including the loss of your home), but they’re an option if that's what it takes to graduate. If you go this route, borrow from reputable institutions like banks or credit unions. Read the fine print of the loan terms to ensure you can afford the loan and that you minimize your risk of default.

Use a Co-signer

If you choose to get a private student loan, your goal to get a loan without a co-signer might not be feasible. It might take years to build your credit and qualify for a loan on your own, which can delay your plans to get an education and start a career. If you’ve tried everything else, consider asking someone to cosign a student loan for you.

Ensure that any potential co-signer understands what’s at stake. Notably, your co-signer must repay your loan if you can't do so. If you miss or make late payments, both your and your co-signer's credit will take a hit. Lenders may even involve collection agencies to recoup unpaid funds or sue the co-signer.

Your co-signer must be willing and able to accept the risk, but it might be smaller than you imagine. For example, your involvement with the co-signer might be shorter than you’d expect. With some student loans, co-signers are temporary—they can be removed from the loan after you successfully make a certain number of on-time payments or satisfy credit-related conditions. This feature allows you to move on independently and allows your co-signer to step away from the risk of having to repay your loan if you can't do it. 

Choose an Alternative Funding Source

There are other ways to pay for school that don't involve taking on debt, eliminating the need for a co-signer: 

  • Grants and scholarships provide free money that doesn't have to be repaid. You have to apply, however, and you never know if your efforts will be rewarded.
  • Working during school takes valuable time away from your studies, but the income could prove useful. Some schools offer work-study programs, and colleges always have businesses nearby that might be hiring part-time workers.
  • Cheaper institutions could be the best option if funds are tight. If necessary, transfer to another school after getting started at a less expensive college. But ensure any credits you earn will count toward your final degree.
  • Employer-paid tuition might also be available from companies in your area. It might not be your dream job, but those jobs start to look better when you factor in the benefit of a paid education to your compensation package.

Article Sources

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  2. Federal Student Aid. "The U.S. Department of Education Offers Low-Interest Loans to Eligible Students to Help Cover the Cost of College or Career School." Accessed June 8, 2020.

  3. Federal Student Aid. "The Federal Perkins Loan Program Provided Money for College or Career School for Students With Financial Need." Accessed June 8, 2020.

  4. Federal Trade Commission. "Student Loans." Accessed June 8, 2020.

  5. Experian. "My Credit Score." Accessed June 8, 2020.

  6. MyCreditUnion.gov. "Personal Loans: Secured vs. Unsecured." Accessed June 8, 2020.

  7. Discover. "Secured Versus Unsecured Loans for Higher Education." Accessed June 8, 2020.

  8. Consumer Financial Protection Bureau. "What Is a Co-Signer for a Student Loan?" Accessed June 8, 2020.