Getting approved for private student loans without a cosigner can be tough, especially if you have a thin credit file and no steady income. But you have options, even if you’re an independent student without parental support.
The best borrowing options for most students are federal student loans and Direct Subsidized, Unsubsidized and PLUS Loans — and PLUS Loans only require a cosigner-like endorser if you have an adverse credit history (or a major credit flare-up, such as four-figure debt that’s 90 or more days delinquent, a loan default or a foreclosure).
If you’ve exhausted your federal financial aid, the key to finding the best private loan without cosigner support is understanding lenders’ eligibility requirements and comparing interest rates and fees.
Below, we’ll break down your federal loan options and the top six private lenders offering no-cosigner student loans.
Methodology
To rank the best student loan options without cosigner backing, our editors reviewed two dozen of the most popular and widely available private lenders, including banks, credit unions and online companies. The lenders that netted the highest out-of-five ratings were rewarded for their competitive interest rates, accessible eligibility criteria, repayment safeguards and customer service records. View our complete methodology below.
- Number of lenders reviewed: 23
- Number of data points analyzed: 551
- Number of features we considered: 25
- Number of primary data sources used: 28
APRs
4.83% to 16.16% (fixed), 6.15% to 16.08% (variable)*
Loan amount
$2,001 to cost of attendance
Repayment terms
5, 7, 10, 12, 15 or 20 years
On Ascent’s Website
Federal Direct Subsidized, Unsubsidized Loans
Best student loan without a cosigner
Why we picked it
Federal Direct Subsidized and Unsubsidized Loans aren’t credit-dependent, so you won’t need a cosigner to access them. Instead, you must fill out the Free Application for Federal Student Aid (FAFSA) to qualify. These loans also have certain protections, including income-driven repayment (IDR) plans, deferment and forbearance and paths to forgiveness. Plus, the government pays the interest on subsidized loans while you’re in school and during certain grace and deferment periods, saving you money in the long run.
Lorem ipsum
These loans’ interest rates are uniform and set yearly by Congress, rather than being based on perceived creditworthiness. So, if you have excellent credit, you might qualify for a lower-rate private loan. Another key difference between federal and private student loans is that federal loans have no variable rate option. The maximum loan amounts can be more limited, too, especially for subsidized loans, which are capped at $23,000 and require that you demonstrate financial need. The aggregate borrowing limit for unsubsidized loans could reach $31,000 to $57,500, based on your subsidized loan borrowing amount and dependency status.
Pros
- No formal application — just the FAFSA
- No credit required
- Access to protections like IDR plans and forgiveness programs
- Subsidized loans can help you save on interest
Cons
- Interest rates may be higher than credit-based loans for especially creditworthy applicants
- Higher rates for grad students than for undergrad borrowers
- No variable-rate option
- Limited annual and aggregate loan amounts
- Loan fee of about 1% of the loan amount
Who should consider it
Almost all students who have exhausted non-borrowing forms of financial aid (like grants and scholarships), particularly if you have trouble qualifying for private loans
*Rates for the 2023-2024 academic year
Federal Grad PLUS loans
Best federal loan supplement without a cosigner
Why we picked it
Federal Grad PLUS loans are another federal option available exclusively to graduate students. These have higher maximum loan amounts than other federal loans — up to the cost of attendance minus any financial aid you receive. These loans are also eligible for IDR plans, deferment and forbearance, and can lead to forgiveness.
Lorem ipsum
However, Grad PLUS Loans (and Parent PLUS Loans for parent borrowers) require a credit check, although they don’t impose a minimum credit score requirement. To qualify, you can’t have an adverse credit history, though this stipulation may be waived if you can show extenuating circumstances.
Lorem ipsum
Given the one-size-fits-all interest rates, it’s possible that you could be quoted a lower private loan rate with excellent credit. You’ll also pay a 4.228% loan fee for these loans — but you may decide the repayment safety net is worth any potential increase in cost.
Pros
- Application is the FAFSA, which you should file anyway
- No minimum credit score necessary
- Allows borrowing up to the cost of attendance
- Access to IDR plans, forgiveness opportunities
Cons
- No adverse credit history (though exceptions are made)
- Rates can be higher than private loans (if you have excellent credit)
- No variable-rate option
- Loan fee over 4%
Who should consider it
Graduate students without excellent credit (or a cosigner) who have maxed out non-borrowing forms of financial aid and other lower-cost federal loans
*Rate for the 2023-2024 academic year
MEFA
Best private student loan without a cosigner
Why we picked it
With a MEFA private student loan, you have access to competitive fixed interest rates and no fees of any kind, including late fees. In fact, the lender’s maximum rates are the lowest of any lender on our list.
Lorem ipsum
Although making in-school loan payments is always wise, MEFA offers flexibility: There are several in-school repayment options, such as immediate, interest-only and deferred (as long as five years for undergrads and up to three years for graduate students).
Lorem ipsum
However, MEFA doesn’t offer variable interest rates or an autopay discount (both of which are common among student loan lenders). Lastly, while MEFA offers modified payment plans on a case-by-case basis, there’s no guaranteed forbearance option with this lender. So, your options may be somewhat limited if you have trouble making payments down the road (though you could also explore student loan refinancing to a more affordable monthly payment)
Pros
- Low fixed rates
- Multiple in-school repayment options
- Fee free
- Can borrow up to cost of attendance
Cons
- Pre-qualification not available
- No autopay discount
- No variable-rate option
- Not available to international students
Who should consider it
Creditworthy applicants who have exhausted federal loans without a cosigner, especially if you can unlock the lowest advertised rates
*Rates as of Feb. 15, 2024
SoFi
Why we picked it
Online bank SoFi offers competitive rates and access to perks beyond loans. You can easily view your potential rates via pre-qualification without impacting your credit. These loans also don’t have fees, including origination, prepayment or late charges. And if you end up borrowing, you can access SoFi-specific member perks like career coaching and financial planning services.
With a MEFA private student loan, you have access to competitive fixed interest rates and no fees of any kind, including late fees. In fact, the lender’s maximum rates are the lowest of any lender on our list.
Lorem ipsum
However, if you’re applying to SoFi without a cosigner and don’t have the best credit, you may have to settle for double-digit rates. And because the lender doesn’t disclose credit and income requirements, you must pre-qualify to understand your eligibility.
Lorem ipsum
While SoFi offers forbearance, it’s limited to specific situations, like natural disasters and military mobilizations. The lender’s unemployment protection program is for borrowers who lose their job by “no fault of their own” and are in good standing. This would grant up to 12 months of forbearance.
Pros
- Pre-qualification possible
- No fees of any kind
- Multiple repayment options
- Access to benefits like financial planning
- Low rates for those with excellent credit
- Multiple lender-specific features
- Can borrow up to cost of attendance
- May be accessible for “non-permanent resident aliens”
Cons
- Credit requirements undisclosed
- Higher ceiling on interest rates than some competitors
Who should consider it
Borrowers with strong credit who prize lender-specific benefits like advising services or unemployment protection
*Rates as of Feb. 15, 2024, assume autopay discount
College Ave
Best for a quick application process
Why we picked it
According to College Ave, it takes about three minutes to pre-qualify. This lender also features no application fees, a wide range of repayment terms and multiple in-school repayment options (four overall, including deferred payments).
Lorem ipsum
Although College Ave doesn’t have a minimum credit score requirement, the rates for those with poor credit can be high. There’s also a late payment fee that’s 5% of the unpaid amount or $25, whichever is less. Other top lenders skip this fee. And while College Ave offers the option to refinance with them, you must graduate to qualify.
Pros
- Quick application
- Possible to pre-qualify
- Multiple repayment options
- Can borrow up to cost of attendance
- Multi-year loan approval
Cons
- Rates can be high for those with imperfect credit
- Late payment fee
- Must have graduated to refinance
- Not available to international students
Who should consider it
Creditworthy applicants for whom time is of the essence
*Rates as of Feb. 15, 2024, assume autopay discount
Education Loan Finance (ELFI)
Best for customer service
Why we picked it
ELFI’s private student loans without cosigner requirements offer low starting rates and terms ranging up to 15 years, plus they come with access to the company’s “award-winning customer service team.” ELFI, which offers telephone, chat and email support, has also registered high marks with independent organizations like the Better Business Bureau (BBB), Consumer Financial Protection Bureau (CFPB) and online review sites.
Lorem ipsum
Like some other top lenders, there are multiple repayment options, including deferred, interest-only, and immediate repayment. There are also no application, prepayment or origination fees for these loans, which is to be expected for top-ranking lenders.
Lorem ipsum
However, the lender’s variable APRs are capped at 18% — an extremely high rate for a student loan. And while the minimum credit score is 680 (which falls into FICO’s “good” credit category), you’ll likely need excellent credit to qualify for their best rates. There’s also a $35,000 annual income requirement. Plus, you can only qualify for the undergraduate loan option if you’re pursuing a bachelor’s degree (graduate loans are also available).
Pros
- Low starting rates
- Strong customer service track record
- Few fees
- Multiple repayment options
- Can borrow up to cost of attendance
Cons
- High variable rate cap
- Those with poor credit or no income can’t qualify alone
- Not available for pursuing an associate’s degree
- International students aren’t eligible
Who should consider it
Good credit borrowers who earn sufficient income and value a lender’s customer service
*Rates as of Feb. 15, 2024
Rhode Island Student Loan Authority (RISLA)
Best for an affordable repayment plan
Why we picked it
RISLA’s fixed-rate private student loans have competitive rates, with a relatively low upper limit and no fees. But the main draw is its federal loan-like income-based repayment (IBR) plan (up to 25 years in length) if you need more affordable monthly dues — it’s extremely rare for private lenders to offer this option. Plus, you can qualify for multiple years of borrowing based on your initial application.
Lorem ipsum
On the flip side, RISLA doesn’t offer variable rates, which could mean missing out on savings opportunities if rates fall in the future. The minimum credit score requirement restricts borrowing for many, and borrowers must earn at least $40,000 per year to qualify for a RISLA student loan.
Lorem ipsum
Finally, loans are limited to $50,000 per year — which may not be enough to cover the full expenses at some schools.
Pros
- IBR may be available
- Competitive fixed rates
- Multi-year loan approval
- No fees
Cons
- Poor credit applicants not accepted
- High minimum income requirement
- No variable-rate option
- $50,000 annual loan limit
Who should consider it
Good-credit borrowers with sufficient income who want a competitive fixed-rate loan for under $50,000 — with the bonus of IBR
*Rates as of Feb. 15, 2024, assume autopay
Earnest
Best for fair credit borrowers
Why we picked it
With Earnest’s private student loans, there is a nine-month grace period (longer than the typical six), zero fees and you get to skip one payment every year (penalty-free). Another notable feature is the lender’s rate-match guarantee.
Lorem ipsum
The kicker is that you must have a “fair” FICO credit score of at least 650 and an annual income of $35,000. The lender is transparent on precisely what you’ll need to apply and qualify for their loans, which isn’t a given among lenders. For example, it says you need enough savings to cover at least two months of expenses to qualify.
Lorem ipsum
It’s worth pre-qualifying via Earnest’s rate-check tool to quickly assess your standing. Note that these loans aren’t available in Nevada.
Pros
- Transparent eligibility criteria
- Competitive fixed rates
- Option to skip a payment every year
- Nine-month grace period
- Rate-match guarantee
Cons
- Not available for Nevada residents
- Poor credit borrowers won’t qualify
Who should consider it
Fair-credit borrowers who value one of Earnest’s lender-specific perks, from its no-fees policy to the ability to skip one payment per year
*Rates as of Feb. 15, 2024, assume autopay discount and no cosigner
Our picks at a glance
*Rates as of Feb. 15, 2024, may assume autopay discount
Why get a student loan without a cosigner?
- Finance your education. Student loans without a cosigner help you cover the high cost of college without upfront obligation.
- Build credit. Student loans can help you build credit if you keep up with the monthly payments. Over time, repayment can help you raise your credit scores and qualify for better interest rates on other loans. That said, it can be tough to qualify without a cosigner if you don’t already have established credit.
- Apply faster. You can generally apply quickly without a cosigner. However, it can be harder to qualify without a cosigner, especially if you haven’t established a credit history.
How do student loans without a cosigner work?
When you apply for a student loan without a cosigner, you rely on your own credit history to qualify and receive affordable rates. Because you might have a limited credit history, your credit scores may not be as high as those of graduates, older applicants or your parents. So, typically, cosigned student loans carry lower rates.
Another key difference is the repayment process. With cosigned loans, the cosigner is equally responsible for repayment (and puts their credit file at risk if repayment goes awry). Student loans without a cosigner don’t have that built-in backup, at least not formally.
Federal vs. private student loans without cosigners
Private student loans may sometimes require a cosigner, especially if you have a thin credit file. However, federal student loan eligibility and rates aren’t credit-dependent (though federal PLUS loans can include a credit check).
As a result of these basic differences, federal loans are easier to qualify for — and they come with borrower protections like IDR plans and paths to loan forgiveness that private loans lack. That’s why it’s generally wise to prioritize federal loans, even though their rates can be higher than the lowest available rates from top private lenders.
Here’s a breakdown of the rates and fees for different types of student loans:
*Rates and fees for the 2023-2024 academic year **Rates as of February 2024
Related >> Student loan refinance rates
Eligibility requirements for no-cosigner student loans
To qualify for a private student loan without a cosigner, you must meet the minimum lender requirements, which typically include:
- Have enough income to make loan payments. To determine how likely you are to repay a loan, lenders review — and may impose minimum requirements for — your annual income and debt-to-income (DTI) ratio. DTI, in particular, helps lenders evaluate the percentage of your monthly pre-tax income that’s put toward your existing debt.
- Meet the minimum credit score requirement. Some lenders have no minimum or won’t publicly disclose it, but you’ll generally need credit scores of 650 and higher to qualify independently. Even higher scores are needed to unlock the lowest advertised interest rates.
- Be enrolled in a qualifying program. Some lenders limit their loans to specific programs, like undergraduate and graduate programs, rather than associate’s degrees or certificate seekers.
What options are available for international students without a cosigner?
If you’re an international student without a U.S.-based cosigner, you still have funding options. Lenders that cater to you include Prodigy Finance and MPower Financing.
Just keep in mind that you must meet the usual requirements for getting a loan without a cosigner, such as attending a school or program that the lender will work with and being from a country they support. There may also be credit requirements, though some lenders consider alternative criteria, such as your academic track record, field of study and career prospects.
And although federal financial aid (via the FAFSA) is generally only available to U.S. citizens, there are exceptions for certain groups, like refugees, those who’ve been granted asylum, conditional resident aliens and those who have a T-Visa, among others. So, in those cases, it’s still worth filling out the FAFSA (via StudentAid.gov) to access grants, work-study programs and federal loans with borrower protections.
Alternatives to non-cosigned private student loans
Federal and private student loans should always be a last resort, and gift aid — like state and institutional grants and college scholarships — should be the priority. That said, there are less traditional alternatives, including:
- Income-share agreements (ISAs): With this type of loan contract, you agree to pay a percentage of your future earnings for a years-long period in order to secure education funding now. Examples of companies that offer ISAs, which may not be wise if you’re pursuing a high-paying profession, include Stride Funding and Yelo Funding.
- Crowdfunding: Family, friends and strangers may be willing to help fund your college expenses, typically in small amounts, via online platforms like GoFundMe.
- Work-study: Federal work-study opportunities are available via the FAFSA and can provide a source of income during college, up to a specified limit. If you have the bandwidth to work while attending school, also consider on-campus jobs, private part-time employment, tuition reimbursement opportunities and paid internships.
How to apply for student loans without a cosigner
- Shop around. Each lender offers a different mix of features and sets unique eligibility rules, so it’s important to look at but also beyond interest rates. Loan calculators can help you figure out potential costs, but also review fees, discount opportunities and even customer service to get the best private student loan.
- Use pre-qualification. This will help you understand if you’re likely to qualify for a loan and at what rates. It’s wise to check personalized rates with at least three lenders that offer pre-qualification. Just keep in mind that rate quotes aren’t formal offers, so your actual rates could be different if you file a formal student loan application that includes a hard credit check.
- Gather your documentation. Once you identify your ideal lender, gather documents for your loan application. This typically includes proof of income (such as a W-2 or tax return, pay stubs and bank statements), some form of ID and information about your employer, if applicable. You must also supply your anticipated graduation date and your requested loan amount.
- Formally apply. Typically, this will be completed online and requires you to upload documentation and provide a Social Security number. The hard credit check could temporarily drop your credit scores by about five points, according to FICO, so limit your formal application to your preferred lender. If approved, sign the loan contract to make it official.
Methodology
To accurately compare 23 lenders with no-cosigner student loans, our editors came up with a list of 25 loan features important to borrowers. We then grouped them into five buckets and assigned appropriate weightings to create out-of-five ratings. Six private lenders stood out from the pack.
Rates (20%)
We considered four data points in this cost category: low and high fixed and variable interest rates advertised by lenders. The lower, the better.
Loan details (20%)
Here, we looked at each lender’s product basics, including fees, minimum and maximum loan amounts and whether independent borrowers are catered to with true no-cosigner loans.
Eligibility (25%)
Our editors weighted this category heaviest since it’s of utmost concern to independent students. We evaluated lenders on their minimum credit score and income requirements, their accessibility to nontraditional borrowers (such as international students) and the number of states where they operate.
Repayment (20%)
This category is key since borrowers are going it alone, without cosigner support. The lenders who fared best offer a wide range of repayment options and protections.
Customer experience (20%)
Our editors relied on independent organizations like the BBB and CFPB, but also took lenders’ customer service for a test drive and rewarded points to those with user-friendly mobile apps.
What didn’t make the cut
Seventeen private lenders of non-cosigned loans fell short of appearing on our list. Here are a few examples of why:
- Advantage Education Loan and Nelnet Bank only offer a single repayment term option.
- Ascent Funding, Iowa Student Loan and MPower Financing have relatively higher fixed interest rates.
- A.M. Money and Prodigy Finance impose federal loan-like administrative or origination fees.
- Edly and Funding U have relatively higher minimum loan amounts.
- EdvestinU isn’t available nationwide.
- PNC Bank has a relatively low maximum loan amount.
Frequently asked questions (FAQs)
Federal student loan limits are set by the government each year, ranging from just a few thousand dollars up to the cost of attendance, depending on the loan type. But, with private loans, the limit can be a specific figure per year or up to the cost of attendance.
Yes, applicants who don’t have a cosigner can access private student loans. In that case, lenders would use your income and credit, among other criteria, to determine whether you qualify and your rate.
For federal loans, you must fill out the FAFSA, which may require proof of identity and income for both you and a parent (unless you’re an independent student). For private loans, you must provide documentation like tax returns or pay stubs, as well as a form of ID and information about your employer, if you have one.
Yes, if you have federal student loans (which don’t require a cosigner), you have several options for loan forgiveness, including Public Service Loan Forgiveness and income-driven repayment plans, like the SAVE plan. If you have private student loans without a cosigner, you may receive relief via loan repayment assistance programs, regardless of whether you borrowed independently or with a cosigner.
Credit: Source link
