For students who have extremely bad credit or lack of any credit, getting a student loan without a cosigner is not as difficult as some may fear. Most students used to rely on private student loans. A private student loan would allow companies to loan student’s funds, but usually had a high interest payment when the student was required to pay the loan back. Between the years of 2018 and 2019, many students went to Federally funded loans. Private student loan applications decreased by half. However, it is speculated by some institutions that unless the government offers more limits, private student loans will far surpass the Federal loans by the time 2030 gets here. In the event a student has really good credit, a private student loan will usually be granted with ease. This option is not usually something people try to obtain because if their credit is less than perfect, a cosigner is needed.
Considering our economy in 2020, great credit is not something many people are able to earn or keep if they already have it. The majority of Federal student loans will not require a cosigner. There are 2 types of Federal loans that most students who do not wish to use a cosigner try to obtain through the government.
Perkins: This loan requires a student to be:
The school you apply to puts their money with Federal money to make this loan available and it is granted on the students most in need. They can choose to give the money in check form to you or apply it directly to the charges you have incurred for the classes and fees. It is generally broken up into 2 or more payments when they allot the funds to your education or directly to you. This type of loan gives a longer period where you have relief from paying it back. There is not a fee involved and they have the option to apply it directly to your financial balance.
Stafford: This loan requires and allows students to:
If you are looking to get private student loans without a cosigner than you will be forced to potentially pay a higher interest rate. Especially if you have bad credit.
The school you choose will usually walk a student through most of this. The process may sound extremely difficult, but it is not as hard as it sounds. In the event a student graduates or stops their classes for reasons out of their control, the repayment has options. A student can file for a forbearance that will allow additional time to repay the loan. If this method is taken and approved, the loan amount in default gets put at the end of the loan. This will keep a student’s credit report safe and eliminate the hassle of loan officers calling. Make sure that you look into grants such as the Pell Grant. Most people are surprised at the number of people who are eligible. This grant takes an extreme amount of pressure off of the student and a significant portion of the amount owed is reduced. Also, being a student earns people a tax credit when filing at the end of the year.