With the cost of college sky high these days, most students are inevitably going to seek out student loans to help for the expense of college. However, as a potential student, you are going to need to make some clear decisions about what type of student loans you want to pursue. There are really two types of loans for students: federal student loans and private student loans. If you are looking for student loans with no cosigner, you will be able to find this type of loan from either the federal government or private student loans.
Student loans with no cosigner are a special type of loan, usually given out to students who have no credit history. This makes sense, considering that most students don’t have any sort of credit history. By far, the majority of students coming into college are too long to really have established any sort of credit.
So what to do if you are a student with no credit looking for a loan for college? Well, the obvious thing will be to get a federal student loan without cosigner such as the Stafford Federal Student loan. Now, the only loan for students that absolutely will not require a cosigner are government student loans (like the previously mentioned Stafford loan). The reasoning is pretty obvious here – the government is not trying to make money from your education and has no vested interest in using your credit history to determine your loan status.
Now, if a student has the backing of parents (parents with good credit history), getting a private student loan with a co-signer is not a problem. The parents can simply help cosign the loan and the student will get the money. Simple.
However, private student loans without a cosigner are a different beast to find altogether. It’s easy to get private student loan with good credit, or if you have a cosigner with good credit willing to help cosign the student loan, but if you are not fortunate to have such a person, it can be a challenge getting a private student loan.
So, why would you want private loan to help pay for college when there are many government college loans available? Most students find that government loans are not enough to pay the full cost of university. As a student, you are going to have to find a supplemental source of income to help cover the cost of college. That source can come from your parents, a job, or from another loan – in this case, a private loan for college students.
But, private loans are run by businesses, and businesses want profit above everything else. Every lender wants to minimize the risk they take, so credit checks are a must. Students with no credit are an enigma to lenders – lender have no idea if such a student will be a good client and repay a loan on time, or will be a bad client and seek to default on the loan. Hence, a lender will try to protect their own interests by first having someone with good credit cosign for the student loan. This protects the private loan lender since if the student proves unreliable for repaying the loan, the student loan cosigner will be responsible for paying back the student loan.
This is a good system in theory – it protects the lender from risky business. But it’s not a good policy for students who have not cosigners to help them out. What can you do if you are college student without family or relatives willing to cosign? Or maybe you simply don’t want to have another cosigner. Students like this will likely have already received government student loans without a cosigner and need even more funding.
The solution is to seek out a bad credit student loan lender. There are many of these types of loans around. Bad credit lenders are willing to take a risk on lending to people with poor credit or no credit. However, keep in mind this does not come “free.” You are going to have to pay extra interest for this privilege of getting such a loan with no credit history.
Now, if you are seeking out student loans without a cosigner from private bad credit lenders, you can lower the interest rates if you are in fact willing to do a bit of comparison shopping. There are a variety of online offers you can check out – but don’t look before you leap. Compare the different offers to find the lowest interest rates and do some research on the lending company to make sure it’s legit.
With the price of school rising each day and the government cutting student funding, you are probably going to have to seek out a private student loan at some point – so if you don’t have a cosigner for your loan, don’t sweet – just put some solid effort into searching out the best student loan lenders that don’t require cosigners.
