Getting a loan is never easy especially if you are a student. Students are busy with their assignments and schoolwork and they have little time to earn money. Also, they are young and usually have no credit history. Since they don’t have a stable source of income and have no credit history, most lenders avoid giving loans to students if cosigner is not involved. Even though getting a loan without a cosigner is difficult, it is not impossible for a student to get a loan if they don’t have a cosigner.
Start with Government Loan Programs
There are many government loan programs that offer loans to students who cannot find a cosigner. For example, students with no cosigner and credit history can apply for Stanford Loan. However, the problem with Government Loans is that there is a limit to the amount you can borrow. Government loan programs usually have limits which prevent you from borrowing when the limit is reached. Most students who borrow money start with government program and move to private loan when they exhaust their government loan limit.
Private Student Loans
Private student loan is a significant source of funding for those who want financial aid to attend school. These loans are given by private lenders to students who have exhausted their government loan limit. Some of the features of these loans include flexible repayment plan and high borrowing limit.
Types
These loans are divided into two broad categories:
- Direct to Consumer Loan
- School Channel Loan
Direct to consumer loans are distributed directly to the students and usually carry a high rate of interest when compared to school channel loans. These loans have little restrictions and can be used by students in a manner that they deem fit.
Private school channel loans are loans that are directly disbursed in schools. These loans are usually disbursed against the tuition bill of the students.
Importance of Cosigner
When you apply for a federal loan, you don’t need a cosigner. However, most private lenders need a cosigner when you apply for a student loan. The significance of cosigner increases if you have a bad or no credit history. Even though there are many advertisements that claim to offer private student loans without cosigner, most of these claims are dead ends or scams that are designed to cheat students.
Loans without Cosigner
Most private lenders avoid giving loans to students who don’t have a cosigner to guarantee their loan. Getting a private student loan without a cosigner is possible if you have an excellent credit history or have a collateral that you can use to get a loan. There are many students who use their car or any other property to get a private student loan. Even though the funds that students receive by pledging the car are minimal, it can definitely help those who don’t have any other source of financing. Some private lenders may consider giving you a loan even if you don’t have a credit history. These instances are rare and are usually possible if you have solid income to repay your loan.
Building your Credit
If you are unable to get a cosigner for your student loan, it is best that you start taking steps to build your credit. Building your credit is not easy as it can take several years to get a decent credit score. You can build your credit score by borrowing responsibly and paying your dues on time. You can also work part-time and use the income to get a secure credit card. This will help in improving your credit score and make it easy for you to get a private student loan.

