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Knowledge Hub / How to Take Out Student Loans Without a Cosigner
How to Take Out Student Loans Without a Cosigner

How to Take Out Student Loans Without a Cosigner

Paying for College
ELFI | December 10, 2020
How to Take Out Student Loans Without a Cosigner

Borrowing student loans can be helpful to cover your educational expenses. One big decision, however, is deciding whether to move forward with or without a cosigner for your private student loans. When you borrow private student loans, your lender will run a credit check to determine whether you qualify. The credit check will also help determine your interest rate on private loans. If you don’t have a high credit score, you may need a cosigner to qualify for the best possible interest rate.

Pros of Taking Out Student Loans Without a Cosigner

If your credit score is strong, you can choose to take out student loans without a cosigner, it just may take some work. Here are a few benefits to consider: 

Less Reliance on Others

If you are able to qualify for a student loan without a cosigner, it may be a better option for you because you will be relying less on others for financial assistance. Although you as the borrower are responsible for making the monthly payments, the cosigner can be on the hook for the payment if you are unable to make them. Relying less on others will give you freedom from any financial tension between you and your cosigner.

Reduced Financial Burden for Loved Ones

Even if you have a willing parent or relative who can act as your cosigner, you may be concerned about creating a financial burden for them. Without a cosigner, you don’t have the possibility of the loan becoming their responsibility. 

Cons of Taking Out Student Loans Without a Cosigner

While there are pros to applying for student loans without a cosigner, you may also face challenges. Be sure to consider the drawbacks, in addition to the benefits:

May Be Harder to Qualify

If you don’t have a cosigner, it may be harder to qualify for a student loan. Private lenders have certain eligibility requirements, two of which often include a minimum income and credit history. The general eligibility requirements for private student loans are discussed below.

May Have Higher Interest Rate

Even if you can qualify for a loan without a cosigner, you may not earn the interest rate you were hoping for. If you’re approved for a high interest rate, you may pay more in interest over the life of the loan. Your credit score and history will be the main determining factors of your interest rate. If you have a higher credit score, you may be able to qualify for a lower interest rate. However, if you are lacking a strong credit history and score, a cosigner may be advantageous for you. 

Eligibility Requirements

If you are determined to get a student loan without a cosigner, you must meet certain lender eligibility requirements. The requirements will vary by lender, but in general, the criteria include:

For more information about student loan eligibility, explore our blog on how student loans work.

Pursuing Loans Without a Cosigner

There are some scenarios where it is possible to pursue borrowing private student loans without a cosigner, here are some ways to accomplish that:

Bottom Line

Taking out student loans without a cosigner is possible. Consider the scenarios above that might make it possible to pursue your dream school and work toward your long-term goals.