Can You Get a Private Student Loan Without a Cosigner?
Most private student loans require a cosigner, which makes it difficult for students who want or need to get a loan without one. Nearly 90 percent of private loans had cosigners, according to a recent study by the Consumer Financial Protection Bureau. However, it is still possible to get a private student loan without a cosigner.
Although Federal student loans often have better terms and income-driven repayment plans, private loans do offer some advantages as well, including higher borrowing limits, which can benefit students in fields that require more money for study, such as law and medicine.
Private student loans work a lot like mortgages or auto loans, wherein borrowers are approved on credit worthiness, unlike Federal loan approval, which only requires you to apply for the FAFSA. Many lenders look for a positive credit history with a score of 700 or above. Young borrowers who don’t have good credit history built up yet may find difficulty getting private student loans. Additionally, many lenders want to see proof of income, which can prove difficult for borrowers in school.
Boosting Your Credit Score
The key way to qualify for a private student loan without a cosigner is to build your own credit history and by having a great credit score (above 750). Below are some options for you to boost your credit, even if you are young and in college.
If you are under 21, you basically have two options, thanks to the Credit Card Act of 2009, which makes it difficult for individuals under 21 to get a credit card.
• Become an authorized user of someone else’s card so the credit history shows on your report, giving the potential to boost your score.
• Obtain a credit builder account where you can get a small loan that you use to pay yourself back. This boosts your score and reports to credit bureaus.
If you are over 21, you can get a secured credit card if you have no history. Use and pay off our cards regularly and on time and you will see your credit build so you can get a private student loan with no cosigner.
For help on improving your credit, contact us today.