It’s possible to get a private student loan without a cosigner, but you’ll have to go with specific lenders that offer no cosigner student loans. These can come with higher interest rates and additional fees. This article covers what you need to know about private student loans, cosigners, and more.
What Is a Private Student Loan?
A private student loan is a loan borrowed from a private financial institution, usually a bank or credit union. The lender typically approves loan applications based on the applicant’s credit history. By reviewing your financial background, the lender can make informed decisions about your ability to repay the loan in the future.
Established credit, a good credit score, consistent income, and a low debt-to-income ratio (DTI) can result in more borrowing power, lower interest rates, and other favorable terms.
What Is a Cosigner?
However, most high school students don’t have established credit or a consistent, high enough income in order to get approved for a private student loan. They often need assistance through a cosigner.
A cosigner is someone who has a better credit history than the student borrowing the money, which can meet the lender’s requirements. They’ll sign with you on a private student loan, which makes them just as responsible for the loan as you are. In the event you can’t or don’t pay the loan back, the lender will be reaching out to the cosigner about repayment. If the loan isn’t repaid, both of you will default, which can negatively impact your credit for years.
Private vs. Federal Student Loans
You should always start with the Free Application for Federal Student Aid (FAFSA) if you need assistance paying for college (it’s also a good idea even if you don’t). Every first-degree student who completes the FAFSA is offered several federal loan options, which come with lower interest rates and more borrower protections compared to private student loans.
However, if these loans plus scholarships and grants aren’t enough to cover the total cost of attendance at your college, you might have to take out private student loans to cover the gap. Which leaves students wondering, “Is it possible to get private student loans without a cosigner?”
What Happens If You Don’t Have a Cosigner?
Acting as a cosigner can be a huge financial risk. It increases the cosigner’s DTI, which in turn can make it more difficult for them to get loans themselves, such as car loans or mortgages. They’ll also have to pay the money you owe if you don’t pay it back for any reason, which can be a scary prospect.
Unfortunately, not all students have someone who is willing or able to cosign their loan.
Many private lenders will reject your loan application outright if you don’t have a credit history or a cosigner. Without a credit history, they have no way of knowing whether you will be a good or bad borrower and without a cosigner, they have no way of getting their money back from you. It’s too much of a risk for the lender.
However, there are some exceptions thanks to no cosigner student loans.
What Is a No Cosigner Student Loan?
Some private lenders offer no cosigner student loans. However, they tend to have much higher interest rates and administration fees compared to loans that require a cosigner or federal student loans. This is a way of protecting their interests, and borrowers can look at it as the price they have to pay for not meeting the loan requirements.
Although these can be expensive, there are ways to keep costs down, including these tips:
- Compare lenders. Several lenders offer no cosigner student loans, and not all will offer the same terms. Compare interest rates, loan lengths, fine print, fee costs, and more to determine the best deal.
- Apply when interest rates are low. When possible, apply when interest rates are lower than average to save money in the long run.
- Pay off the loans as soon as possible. Most student loans, including private loans, don’t have prepayment penalties. That means you can pay it off as soon as you’re financially able to. Even if you had to take on higher fees and interest without a cosigner, you could offset those extra costs by paying it off quickly.
Best No Cosigner Student Loans
To get you started on your search, we recommend starting with these lenders that offer no cosigner student loans:
1. FEDERAL SUBSIDIZED/UNSUBSIDIZED LOANS
The FAFSA and federal student loans should always be your first stop if you need assistance paying for college. With a fixed APR between 5.50% to 7.05% in 2024, they offer much lower interest rates than most private lenders, and some undergraduates can qualify for up to $12,500 a year. Federal subsidized and unsubsidized loans also have generous repayment benefits and forgiveness programs. In addition, subsidized loans don’t incur interest until after you’ve graduated or left college.
2. FUNDING U
Instead of focusing on your credit history (or your family’s credit history), Funding U focuses on your academic ability. Undergraduate students can qualify if they are attending college full-time, have the minimum required GPA, and going to classes on-campus rather than online. The GPA threshold depends on the student’s year in college, and they must at least meet Satisfactory Academic Progress (SAP).
However, this program isn’t available at all colleges or in all states. Interest rates for Funding U’s private loans are fixed.
3. ASCENT
Ascent has two non-cosigned loans available for students attending eligible colleges and universities and are enrolled in a degree program at least half-time.
The Non-Cosigned Credit Based Loan is for all undergraduate and graduate students who meet the minimum income and credit requirements (usually low to mid 600s). The Non-Cosigned Outcomes-Based Loan is for undergraduate juniors and seniors who will graduate within nine months, even if they don’t have credit. In addition, they must have a 3.0 GPA or higher and meet the institution’s SAP.
Both fixed and variable interest rates are available, and terms can vary between seven and 20 years, depending on the loan. Ascent provides borrowers with financial wellness resources, interest rate reduction programs, nine month grace period after graduation, repayment programs, and cash back rewards. Parent and cosigned loans are also available through Ascent.
4.A.M. MONEY
As with Funding U, A.M. Money’s no cosigner student loans don’t require a minimum credit score, but instead base your eligibility on your GPA. This program is only available to students with a 2.8 GPA who are attending participating colleges in Illinois. Interest rates are based on the expected graduation rate.
Two benefits of this program include deferred payment options until after graduation and income based repayment options for up to 36 months.
5. EDLY
Undergraduate juniors, seniors, and graduates attending school at least half-time and majoring in a qualifying program could be eligible for Edly’s Income-Based Repayment (IBR) No Cosigner Student Loan. Repayments aren’t required until four months after the borrower graduates if they’re making at least $30,000. Interest will still accrue even if the borrower doesn’t meet this threshold, but payments won’t be required.
Students can borrow up to $20,000 with a 7-year (84-month) term length. However, this no cosigner student loan isn’t available in all states.
If possible, finding a cosigner could help you get private student loans with lower interest rates and better terms. However, if you don’t have anyone willing to be a cosigner, you still have options. You can also help pay for college by completing the FAFSA and applying for grants and scholarships.
Want to learn more about private student loans? Start comparing lenders here.
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.34%-15.96%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
4.92% - 15.08% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
4.50% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.50% - 14.56% Variable
3.69% - 14.41% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
4.99% - 16.85% Variable
3.47% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
|
|
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
