Best Student Loans Without a Cosigner

It is hard to find good private student loans without a cosigner

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If you need help paying for college, private student loans can help fill the gap that federal financial aid doesn't cover. Most college students don't earn a lot of money, nor do they have lengthy credit histories, so the majority of private lenders encourage student applicants to have a cosigner on their application. In fact, according to AARP's 2019 "Survey of College Debt on Behalf of Others," cosigning a loan is the most common debt type among people age 50 and older.

Unfortunately, not everyone has relatives willing to cosign a loan application with them, making it difficult to qualify for a loan. If that's the case for you, here's what you need to know about getting a private student loan without a cosigner.

It's best to exhaust all of your federal student loan options before even considering private student loans. The rate for federal undergraduate Stafford loans issued after July 1, 2020 (through June 30, 2021) is 2.75%—down from 4.53% the previous year.

Best Overall : Ascent


Ascent

We looked at 12 national private student loan lenders to identify the best ones for borrowers without a cosigner. What we found was surprising. Out of the 12 lenders we looked at, 11 lenders don't require borrowers to have a cosigner, but they do encourage adding one to your application.

Only 5 of the lenders listed their income requirements for non-cosigned loans, and the income minimum is often steep for a college student. Ascent offered the most flexibility for students without a cosigner. 

Students with 2+ years of credit history who make at least $24,000 per year and have a low debt-to-income ratio are eligible for a Non-Cosigned Credit-Based loan from Ascent. While you don't need a cosigner, the minimum credit score requirement is reported to be 680 for independent borrowers (versus as low as 550 for applicants with a creditworthy cosigner).

Non-Cosigned Credit-Based loan details: 

  • Variable interest rate: 1.85% - 9.60% (with Autopay)
  • Fixed interest rate: 3.26% - 11.42% (with Autopay)
  • Repayment terms: 5, 10, or 15 years
  • Loan amounts: $2,000 to $200,000
  • Discounts: 0.25% automatic payment discount
  • Additional benefits: Defer payments up until 9 months after graduation, and earn 1% cash back upon graduating from college

Students with no credit score, or those who meet a minimum credit score but lack 2 years of credit history, can apply for Ascent's Non-Cosigned Future Income-Based loan, which is available to qualified juniors and seniors only. To qualify, the student must have a GPA of 2.9 or higher, in addition to being at least 18 and either a U.S. citizen or permanent resident. You'll likely pay a higher interest rate than credit-based borrowers, but income-based borrowers can take advantage of a 2% autopay discount.

Non-Cosigned Future Income-Based loan details: 

  • Variable interest rate: 4.10% - 11.10% (with Autopay)
  • Fixed interest rate: 5.62% - 12.93% (with Autopay)
  • Repayment terms: 10 years
  • Loan amounts: $2,000 to $200,000 (max of $20,000 per academic year)
  • Discounts: 2% automatic payment discount
  • Additional benefits: Defer payments up until 9 months after graduation, and earn 1% cash back upon graduating from college

Read the full review: Ascent Student Loans

Best for International Students : MPOWER Financing


MPOWER Financing

International students have an even harder time finding a student loan that doesn't require a cosigner. There are currently only 2 lender options—Prodigy Finance and MPOWER Financing—and Prodigy limits its non-cosigned loans to students seeking graduate degrees in STEM, healthcare, or public policy.

MPOWER offers student loans to a broader range of international students including undergraduate and graduate students from 190 countries attending over 350 partner schools in the U.S. and Canada.

Rather than using your credit score when considering your loan application, MPOWER makes loan decisions based on your future potential and reviews your credit history to verify your payment history. In fact, MPOWER does not even consider cosigners or co-applicants. While there's no variable rate option, its fixed interest rate is competitive.

Undergraduate non-cosigned loan details:

  • International fixed rate: 14.98% APR (13.63% with all discounts)
  • DACA fixed rate: 10.91% APR (9.56% with all discounts)
  • Repayment term: 10 years (starting 6 months after graduation)
  • Loan amounts: $2,001 to $25,000 per loan and a $50,000 lifetime limit
  • Discounts: 0.50% discount for setting up automatic payments; 0.50% discount after 6 on-time automatic payments; and 0.50% for reporting proof of graduation and employment
  • Additional benefits: Interest-only payments while in school and 6 months after graduation; Free visa support letter; U.S. credit history building; Career support

Read the full review: MPOWER Financing Student Loans

Best Student Loans Without a Cosigner
Best Student Loans Without a Cosigner

FAQs

Do All Private Student Loans Require a Cosigner? 

Luckily, not all private student loan lenders require you to have a cosigner. Of the 12 lenders we looked at, only CommonBond required borrowers to have a cosigner to qualify for a loan. Most of the other 11 lenders encouraged borrowers to add a cosigner to their application; however, if you meet their credit and income requirements, you can get a loan on your own. MPOWER does not consider cosigners when approving student loans.

However, meeting the requirements while still in school can be difficult. Of the lenders that listed their minimum incomes for non-cosigned loan applicants, Ascent had the lowest minimum at $24,000. Other lenders had income requirements of $30,000 and up. If you're in school full-time, it can be difficult to find a job that allows you to earn that much while juggling your coursework, which is why having a cosigner can be so advantageous.

International students in the U.S. are far less likely to find a student loan that doesn't require a cosigner, although there are some available at select institutions.

How Can You Get a Student Loan Without a Cosigner?

If you need to borrow money but don't have a cosigner, you should first make sure you exhaust all of your federal financial aid options, including student loans. 

Unlike private loans, federal student loans don't require a credit check, nor do they have minimum income requirements. As a college student without an established credit history or salary, federal loans can be your best option.

If you still need more financial help after taking out federal loans, focus on building your credit score and earning an income. In some cases, it may make sense to go to school part-time so you can work more hours and earn enough money to qualify for student loans on your own. Or, you can work full-time during the summer and part-time during the school year to reach the minimum income requirement.

Given the limited number of options without a cosigner, be sure to carefully research every private loan you're considering and beware of lenders who may attempt to take advantage of your difficult situation.

What Are The Advantages of Having a Cosigner?

If it's at all possible to find a friend or relative to cosign the private student loan application with you, it's a good idea to do so. There are 2 main advantages: 

  1. You Increase Your Chances of Qualifying for a Loan: The vast majority of private student loans issued to borrowers have cosigners. Having a cosigner decreases the lender's risk, making them more likely to issue you a loan so you can complete your education.
  2. You May Qualify for a Lower Interest Rate than You'd Get on Your Own: If you can qualify for a loan on your own, you may get stuck with a higher interest rate because of your credit score or income. By adding a cosigner with good credit and a stable income, you can get a lower interest rate on your loan. Over time, that lower interest rate will help you save thousands in interest charges. 

How You Can Strengthen Your Application With a Cosigner

Although it is possible to get a private student loan without a cosigner, it's difficult. As a college student, you're unlikely to meet the lenders' income or credit requirements, and adding a cosigner improves your chances of getting a loan and qualifying for a low interest rate.

If you're worried about burdening your cosigner, keep in mind that several lenders offer cosigner releases. After a few years of making all of your payments on time, you could be eligible to have your cosigner removed from the loan, ending their obligation. A cosigner release allows you to enjoy the benefits of having a cosigner, and you can still remove the cosigner's liability for the loan later on when you are earning a regular salary and have improved your credit. But, bear in mind, benefits such as cosigner release may be limited to U.S. citizens and permanent residents.

How We Chose the Best Student Loans Without a Cosigner

Investopedia is dedicated to providing consumers with unbiased, comprehensive reviews of student loan lenders. We collected over 45 data points across more than 15 lenders including interest rates, fees, loan amounts and repayment terms to ensure that our content helps users make the right borrowing decision for their education needs.

Article Sources

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  1. AARP Public Policy Institute. "The Student Loan Debt Threat: An Intergenerational Problem." Accessed March 20, 2021.

  2. U.S. Department of Education: Federal Student Aid. "Federal Interest Rates and Fees." Accessed March 20, 2021.