Around 1 in 5 Americans hold student loans, which is hardly a surprise. After exhausting your scholarship, grant, work-study, fellowship, and financial aid options, student loans are a plausible option for filling in the gaps in your education costs.
Given the nationwide student debt crisis, it’s more important than ever to secure a competitive student loan that offers quality terms, like low-interest rates, loan deferment/loan consolidation options, and an ample repayment period.
Typically, the parent/guardian of the student helps navigate through the process of securing student loans and paying for tuition. Going through the process alone, however, can be overwhelming and lonely, but we’re here to help.
If you’re a student who is looking to land a good student loan option without the help of your parent(s), continue reading this article.
Explore Federal Loan Options
The United States Department of Education offers student loan options for qualifying students in the U.S.
Federal student loans are usually the better option as opposed to private student loans because federal student loans come with a plethora of benefits that private loans do not offer, such as loan cancellation, fixed interest rates, interest rate reduction, income-driven repayment plans, etc. Most federal student loans also do not require a cosigner or a credit check, which most private student loans do.
Before exploring your federal loan options, be sure to submit your Free Application for Federal Student Aid (FAFSA) so that your financial aid package can be calculated and your eligibility can be determined for grants, scholarships, work-study, and student loans.
There are three types of federal student loans:
- Direct Subsidized Loans
- Direct Unsubsidized Loans
- Direct PLUS Loans
Since you are applying for student loans without a parent or guardian, consider the Direct Unsubsidized Loans and the Direct Subsidized Loan options.
| Direct Subsidized Loan | Direct Unsubsidized Loan |
| For undergraduate students with demonstrated financial need | For undergraduate and graduate students; do not need to demonstrate financial need |
| Your school determines how much you can borrow. | Your school determines how much you can borrow. |
| The U.S. Department of Education pays the interest on the loan • If you’re in school at least half-time • During deferment • During the first six months of a grace period | You must pay the interest on the loan at all times. |
As you can see, the Direct Subsidized Loan is a far better option than the Direct Unsubsidized Loan. This is because you do not need to pay the interest on the loan if you’re in school half-time or more, during loan deferment (when you can temporarily stop making loan payments due to difficult financial circumstances), and during the first six months of your grace period (a period of time that allows the borrower to delay their payment for a short period of time).
Find a Friend or Other Relative to Cosign
91% of undergraduate loans are cosigned. When applying for private student loans, it’s extremely likely that you will need a cosigner, or an additional person who will take responsibility for the loan with you.
Anyone can be a cosigner, as long as they are 18-years-old or older and have a steady flow of income. It’s recommended to have a cosigner with an excellent credit score, however, to get you more favorable terms for your private student loan. Having a cosigner with adverse credit history can harm your chances of receiving a competitive student loan.
Having a cosigner tends to be necessary because most students don’t have a credit history and aren’t considered to be trustworthy borrowers; therefore, having two people responsible for a loan makes it more likely that the loan will be paid back.
More often than not, having a cosigner on your loan will be a make-it-or-break-it factor when it comes to being approved for a private student loan.
If your parents cannot or will not cosign a private student loan for you, consider asking a friend or other relative to cosign the student loan with you.
If someone cosigns a loan with you, their credit score and credit history are as on the line as yours is. Asking someone to cosign a loan with you is a very serious thing, so it should be done thoughtfully and communicatively.
Find a Private Student Loan Without a Cosigner
A private student loan that doesn’t require a cosigner comes with its own benefits and drawbacks. For example, the liability of the private student loan doesn’t lie upon two individuals. However, a private student loan without a cosigner will most likely have higher interest rates and less favorable terms in comparison to a private student loan with a cosigner.
According to the Wall Street Journal, undergraduates with a cosigner were offered interest rates of 5.37%, while private student loans without a cosigner offered interest rates of 7.46%.
However, it’s important to take advantage of the private student loan options you have that do not require a cosigner, especially if you do not have the assistance of your parents or others.
Best Student Loans With No Cosigner
Sparrow’s partners offer private student loans that do not require a cosigner. Here are some of the best student loans on the market that you can get without having a cosigner.
Arkansas Student Loan Authority
The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA does not require a cosigner, however, you will need a credit score of at least 670 to qualify. ASLA is a great option for Arkansas students.
Ascent is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for those who do not have a cosigner available, are international or DACA students, or have lower credit scores.
Brazos is a non-profit lender offering educational funding through private student loans available only to Texas residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. While you can qualify for a loan with Brazos without a cosigner, their eligibility criteria is fairly strict. To qualify, you must have a credit score of 720 or higher and an income of $60,000+. Brazos is a great option if you are a Texas resident, have strong credit, and want competitive interest rates.
College Ave Student Loans offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. To qualify for a College Ave student loan without a cosigner, you will need a credit score in the mid-600s. College Ave is a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.
Earnest’s student loans provide funding to undergraduate, graduate, and professional students. If applying without a cosigner, you’ll need to meet Earnest’s minimum credit score requirement of 650. You will also have fewer options when it comes to repayment, leaving you with either a 5- or 7-year repayment period. Earnest is a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.
Funding U
Funding U is an online lender that focuses exclusively on undergraduate students with no cosigner. Rather than looking at your credit score or income, Funding U looks at non-traditional metrics such as your school, major, GPA, and estimated future earnings to assess your creditworthiness. Funding U’s student loan is best if you are a high-achieving undergraduate student with limited credit history and no access to a creditworthy cosigner.
LendKey is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey has a proprietary scoring model that assesses your creditworthiness by looking at standard metrics such as your credit score in combination with non-traditional metrics such as your GPA and major. This offers a bit of flexibility for those applying without a cosigner. LendKey is best for students who want a variety of options, competitive interest rates, and generous forbearance policies.
MPOWER is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. MPOWER is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner.
Nelnet Bank offers private student loans for undergraduate, graduate, MBA, law, and health professional students. While you can qualify for a loan with Nelnet Bank without a cosigner, their eligibility criteria is fairly strict. To qualify, you will need a credit score of at 680 or higher and an income of $36,000. It’s best if you are seeking competitive rates, a variety of repayment terms, and a flexible forbearance policy.
Prodigy Finance is an online lender that provides funding to international students. They offer non-cosigned graduate student loans. Prodigy Finance is a good option for international students who don’t have a credit history and can’t access a qualified cosigner.
Sallie Mae is an online lender that provides educational funding to students. They offer cosigned and non-cosigned undergraduate, graduate, and career training student loans. To qualify for a student loan with Sallie Mae, you must have a credit score in the mid-600s. They’re a good option for students seeking competitive interest rates with a creditworthy cosigner.
SoFi began offering private student loans in 2019 and has quickly become a strong option for undergraduates, graduates, law and MBA students, and parents looking to fund the cost of their child’s education. SoFi does not disclose their minimum credit requirements for student loans, so while you may be able to get a loan without a cosigner through them, you may need a higher credit score to do so. If you do qualify, SoFi will offer you competitive interest rates, a diverse set of repayment options, and exclusive member benefits.
To see what student loans you qualify for and at what rate, complete the Sparrow application.
Closing Thoughts From the Nest
Affording school is not easy, but it is definitely doable if you are a strategic, informed consumer.
Before anything, be sure to submit your FAFSA as soon as possible so that you can receive federal financial aid before it runs out.
Secondly, look into as many scholarships, grants, and fellowships as you can to pay for your education. You should exhaust your options to get free money for college as much as possible so that you won’t accumulate overwhelming amounts of student debt.
Read Sparrow’s articles on scholarships and grants to find the best search engines to streamline your application process.
Furthermore, consider picking up a side hustle to be able to save up money to afford college. Whether it be coaching at a local elementary school, writing blogs for companies, or working as a cashier, anything can help.
After completing all of these steps, start researching the private student loan options that you have.
Sparrow’s free online tool can help you do that. If you submit an application with us today, we’ll show you some of the best student loan options on the market and let you compare cosigners so you can find the best rate.
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