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College Students and Recent Grads

How to Get Student Loans Without a Cosigner

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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The cost of tuition is higher than ever, which explains why 70% of students leave college with student loan debt.

But that doesn’t mean that student loans are always easy to get, especially when it comes to private loans. According to MeasureOne, nearly 93% of undergraduates who borrow private student loans do so with a cosigner. Typically a parent or a close friend, having a cosigner can boost your chances of qualifying for a student loan.

But not every student has someone willing to share debt with them. If you’re looking to go it alone, here’s what you need to know about taking out or refinancing student loans without a cosigner.

How to get a student loan without a cosigner: Start with federal loans

If you’re worried about how to get a student loan without a cosigner, here’s the good news: You certainly don’t need a cosigner for federal student loans.

Provided by Federal Student Aid, federal loans for undergraduates don’t have credit or income requirements. To be eligible, you just need to attend a Title IV school and be a U.S. citizen or eligible noncitizen.

On the other hand, PLUS loans for graduate students take your credit into account, but the standards to qualify are very agreeable. The only requirement is that you don’t have an adverse credit history — otherwise, their criteria is similar to that for undergraduate federal loans.

Federal student loans should always be your first stop for borrowing, and not just because they don’t require a cosigner. They also come with relatively low interest rates and protections like income-driven repayment plans and forbearance.

To take out federal student loans, you simply need to submit the Free Application for Federal Student Aid (FAFSA). After reviewing your information on the FAFSA, your college’s financial aid office will offer you a certain amount of federal student loans, as well as any grants or scholarships you qualify for.

At that point, you can choose what parts of your financial aid offer you want to accept, and which parts you’d rather leave on the table.

Types of federal student loans

So what types of federal student loans are available to borrowers? Here are the main ones:

  • Direct subsidized loans are available to undergraduate students with financial need. The government covers interest during periods of deferment. As of July 2018, these carry a 5.05% interest rate and an origination fee of 1.062%.
  • Direct unsubsidized loans are available to both undergraduate and graduate students. These loans accrue interest from the date of disbursement. For the current academic year, they have an interest rate of 5.05% for undergraduates and 6.60% for graduate students, as well as an origination fee of 1.062%.
  • Direct PLUS loans are designed for graduate students. These currently come with a 7.6% interest rate and a 4.248% origination fee.

Direct subsidized and unsubsidized loans come with borrowing limits, so you might need additional funding for school, whether through private student loans or another source.

With PLUS Loans, you can borrow up to the full cost of attendance of your school, but you might need extra loans to cover living costs. Plus, PLUS Loans come with relatively high interest rates, so you might consider refinancing for lower rates.

And if you decide to refinance, or if you need to take out additional loans, here’s what you need to know about applying with a private lender without a cosigner.

Borrowing or refinancing private student loans without a cosigner

Private student loans come with stricter borrowing requirements than federal ones. A private lender wants to ensure you have the means to pay back your loan, so they check your credit and income before approving your application.

Since most undergraduate students don’t have much of an income or credit history, the majority end up applying with a creditworthy cosigner. By adding a cosigner who has strong credit and a steady income to your application, you can boost your chances of qualifying and probably get better interest rates than you would alone.

But a cosigner is just as responsible for the debt as you are, and their credit score could suffer damage if you fall behind on payments. Asking someone to share your debt is a big request, and in some cases, you might feel uncomfortable putting that burden on someone.

Or you might not have anyone you can ask who meets a lender’s requirements for credit and income. If this is the case, you’ll need to find ways to qualify on your own.

Boost your chances of qualifying for student loans without a cosigner

So how can you qualify for student loans without a cosigner? Well, private lenders look for a strong credit score, usually in the mid-600s or higher, and a steady income. Some also look to see that you have a certain amount in your bank account.

To boost your chances, these steps could help:

  1. Establish credit if you haven’t already. A number of factors go into a credit score, including your length of credit, mix of credit types, amounts owed and payment history. If you’ve never borrowed a loan or opened a credit card, you might not have any credit to speak of. So begin by getting a credit card (maybe a secured one at first).
  2. Make on-time payments on any loans or credit cards. Your debt repayment history is a big part of your credit score, so stay up-to-date with any debt in your name.
  3. Make moves to increase your income. Since private lenders often look at your income to determine if you have the means to pay back a loan, increasing your income is sure to help boost your chances of approval.
  4. Lower your debt-to-income ratio. Reducing the amount of debt in your name can boost your credit score, and lowering your debt-to-income ratio is also important to lenders. So if you’re looking to borrow or refinance a student loan, chipping away at your debt and boosting your income will help you get approved without a cosigner.
  5. Seek out reputable lenders with less strict requirements. When it comes to doling out loans, each private lender sets its own requirements. Look for one that’s not so strict about credit scores and income but still offers competitive interest rates. Earnest, for example, looks at a variety of factors when considering candidates for student loan refinancing, not just your credit score and income.

Building credit takes time, so you might have to wait to borrow or refinance until you can meet a lender’s requirements. But by taking these steps, you’ll move closer to becoming a strong candidate for a loan.

Can’t qualify for a loan? Seek alternative ways to afford tuition

If you find yourself unable to qualify for private student loans without a cosigner, look for alternative ways to cover the costs of college. Here are a few strategies that could help:

  • Find a job to earn money. Working a part-time job might be enough, or you could find full-time employment as you pursue your degree part-time. But be careful about restricting your enrollment too much, as you could lose eligibility for federal student loans if you drop below half-time as a student.
  • Seek out companies that offer tuition reimbursement. Some companies will cover the costs of classes for their employees, which could be a huge help if you’re struggling to pay for tuition.
  • Contact your school’s financial aid office about your options. Some schools have emergency loans for students in need, while others might help you renegotiate your aid package or direct you to additional grants or scholarships. Plus, your financial aid office might be able to hook you up with work-study opportunities.
  • Apply to scholarships far and wide. Regardless of your student loan status, make it a priority to apply for grants and scholarships. The more “free money” you can earn for college, the less debt you’ll have to take on.

Because private lenders check your credit and income, it can be tough to qualify for student loans without a cosigner. But if you can boost your financial credentials on your own, you could make yourself eligible for private student loans or student loan refinancing.

And if you’re not eligible right now, keep making moves to build your credit and boost your income. Whatever steps you can take will improve your chances of qualifying for a student loan, and fortify your overall financial health.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Rebecca Safier
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Rebecca Safier is a writer at MagnifyMoney. You can email Rebecca here

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College Students and Recent Grads

College Ave Private Student Loans Review: Accessible Eligibility Criteria, Flexible Repayment

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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If you’re concerned about eligibility for a private student loan, consider that College Ave Student Loans stands out for its accessibility.

You could be an international student without a GED seeking an associate degree on a part-time basis, for example, and still qualify for College Ave private student loans.

Founded by former Sallie Mae executives in 2014, the online-only company offers competitive interest rates to students in college as well as career or graduate schools, as well as their creditworthy parents.

To ensure it’s the right lender for you, consider our review.

College Ave Student Loans review: The basics

While you could qualify for College Ave private student loans with several different educational backgrounds and ambitions, you still need to be creditworthy. Having a credit score of at least 660 is a good start.

The lender doesn’t disclose its specific credit criteria, but you could gauge your (or your cosigner’s) eligibility using the lender’s pre-qualification tool. Passing that test would unlock these loan features:

  • Loans for part- or full-time undergraduates, graduate students, career school students and parents
  • Prequalify with a three-minute application (and without affecting your credit)
  • No fees to apply
  • Fixed and variable interest rates

  • Borrow between $1,000 and your school’s full cost of attendance
  • Choose from four in-school repayment options, including full deferment
  • Select one of four repayment term options: five, eight, 10 or 15 years
  • Receive your loan in as little as 10 days after applying
  • Cosigners are accepted — and encouraged (note that they are required for international students who have a Social Security number)
  • Release your cosigner after more than half your repayment term has elapsed
  • Enjoy a federal loan-like six-month grace period after leaving school
  • Net a 0.25% interest rate reduction for enrolling in autopay
  • No penalty for paying off your loan early
  • Forbearance — the ability to temporarily suspend payments — is awarded on a case-by-case basis
  • Student loan forgiveness in the case of the borrower’s permanent disability or death

While the majority of the loan characteristics above are true no matter your status in school, there are some notable differences for graduate students, career school students and parents.

Graduate students

Whether you’re seeking a postgraduate, master’s, doctoral or professional degree, you can count College Ave private student loans as an option. Note that the ceiling on College Ave’s interest rate ranges as of early June 2019 was significantly lower for graduate students compared to undergrads.

In summer 2019, College Ave also added unique perks for postgraduate students seeking an MBA or other professional degree. The loans include longer grace periods, for example, with 12 months for dental students and 36 months for medical students.

There are also deferments available for students who enter a residency program — or, in the case of law school students, a clerkship — after receiving their degree. Additionally, students seeking these advanced credentials might be able to select a longer loan term (20 years) than their peers.

Career school students

If you’re pursuing an associate, bachelor’s or graduate degree in a career-focused program, including at some community colleges, keep this bonus in mind: College Ave offers borrowers of this loan type a $150 statement credit for completing their program.

Parents

College Ave gives parents even more repayment term flexibility. The lender said on its website that it would assist creditworthy parents in choosing one of 11 possible repayment terms, spanning between five and 15 years.

Another plus of borrowing from College Ave: The lender allows Mom or Dad to directly receive up to $2,500 of the loan funds to cover smaller, secondary expenses including books and supplies. (The balance would be sent directly to the student’s school.)

On the downside, however, the floor on College Ave’s interest rate ranges as of early June 2019 was noticeably higher for parents than for undergraduate students. Plus, parent borrowers only have three in-school repayment choices, not including full deferment. Making interest-only payments is the cheapest option available.

What we like about College Ave Student Loans

It’s rare to find a lender that’s so accessible. In College Ave’s eyes, you don’t need a high school diploma or GED, don’t need to be pursuing a four-year degree, don’t need to be enrolled full time — you don’t even need to be an American student (as long as you have a Social Security number).

Aside from flexibility on qualifying, below are a few more features of College Ave private student loans that benefit from additional context.

A bevy of in-school repayment options

Many private lenders offer fewer repayment options than College Ave. But College Ave provides four payment methods, including:

  • Deferred: Postpone payments until six months after leaving school, allowing interest to pile up on your balance.
  • Flat: Submit monthly dues of $25 to eat into the accruing interest on your loan.
  • Interest-only: Pay only enough each month to cover accruing interest to ensure you face the same balance you borrowed upon leaving school.
  • Full: Enter repayment immediately by making interest-and-principal payments, so you’ll owe less than what you borrowed once you step off campus.

For cash-strapped students, making (significant) in-school payments isn’t always possible. For other students with income or parental support, entering repayment sooner could pave the way for a faster route out of debt. That’s why it’s so nice to have options.

According to the lender, about 6 in 10 College Ave borrowers elect to submit in-school payments to whittle down interest before the reality of repayment hits upon graduation.

Pick your repayment term

Some lenders, including Sallie Mae, assign you a loan repayment term based on your creditworthiness.

One benefit of borrowing College Ave private student loans, however, is that you (and your cosigner) could independently choose your term. You might select five, eight, 10 or 15 years, depending on your budget and future income. (Unlike with federal loans, however, private lenders like College Ave don’t allow you to change terms later, extending or shortening your repayment term as you wish.)
College Ave said on its website that 84% of borrowers choose a term of 10 years or less.

Receive strong customer service

Nearly 400 College Ave borrowers had awarded a 4.8-out-of-5 rating of their lender — at least according to the lender website.

For a more objective accounting, Trustpilot lists a four-star rating for College Ave, and the Better Business Bureau gives the lender an “A+” grade.

What to keep in mind about College Ave Student Loans

If you like what you’ve learned about College Ave private student loans, keep in mind that no lender is perfect for every borrower.

Decide for yourself whether the following facts should point you in the direction of a competitor.

A long trek to cosigner release

By College Ave’s math, 96% of undergraduates have a cosigner on their loan. After all, teens and 20-somethings can make up for their thin credit files by piggybacking on a creditworthy cosigner, usually Mom or Dad.

The majority of top-rated lenders allow you to release that cosigner (from their legal obligation to repay your debt, if you can’t) after 12 to 48 months of successful payment history.

With College Ave private student loans, however, it’s a long haul. To remove your cosigner from your loan agreement, you must:

  • Reach the halfway mark of your loan term
  • Make 24 consecutive on-time payments
  • Show twice as much income as your loan balance
  • Pass a credit check

If you want to reward your cosigner by sending them on their way, you might avoid a 15-year loan term. Under that scenario, you wouldn’t be able to release them until you’ve been in repayment for seven-and-a-half years.

To make matters worse for some borrowers, international students can’t achieve cosigner release at all.

If cosigner release essential to you and your guarantor, you might consider borrowing from Sallie Mae, which offers a 12-month route to release.

A limited form of forbearance

Forbearance is a vital component of any student loan, as it allows you to press pause on your repayment in the face of hardships such as unemployment.

Unfortunately, College Ave is cagey about its forbearance policy, leaving details off its otherwise resource-heavy website.

It turns out, the lender evaluates forbearance applications on a case-by-case basis. In other words, if you find yourself out of work or under another sort of financial duress during repayment, there’s no guarantee College Ave will grant you a reprieve.

If you think you might need a more clear-cut safeguard built into your loan, you might opt to borrow from Discover, as the bank offers a variety of protections, from payment extensions to as many as 12 months of forbearance.

Third-party loan servicing

If you’re attracted to College Ave, in part, because of its modern, easy-to-use platform and strong customer service record, you might be disappointed to learn that the company outsources the servicing of its loans.

Repayment of College Ave private student loans even takes place on a different website. University Accounting Service (UAS) handles statements and payments and fields customer concerns.

When deciding whether College Ave is right for you, factor UAS into the equation, too. You might be wise to contact the latter company to get a sneak peek of its effectiveness in answering your loan management questions.

If you’re left wanting more, you might be better off walking into your local bank or credit union, where your loan will be funded and managed under the same roof.

Are College Ave Student Loans right for you?

If you’re an atypical college student — maybe you’re attending part time or seeking an associate degree — College Ave private student loans are more accessible than education financing found elsewhere.

Even if you’re attending a traditional four-year school, you could be drawn to the online lender’s assortment of in-school and postgraduate repayment options. They give you the power to customize a loan that works best for your borrowing situation. Plus, if you (or your cosigner) are especially creditworthy, you could unlock some of the lowest interest rates offered by banks, credit unions and online competitors.

College Ave won’t be as appealing, however, if you’re counting on a fast pathway to cosigner release or federal loan-like safeguards such as mandatory forbearance. To pit College Ave against the competition, find out where the lender ranked among our top-rated student loan companies.

MagnifyMoney has independently collected the above information related to this review, which is current as of June 3, 2019, unless otherwise noted. College Ave. neither provided or reviewed the information shared in this article.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Andrew Pentis
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Andrew Pentis is a writer at MagnifyMoney. You can email Andrew here

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Building Credit, College Students and Recent Grads, Credit Cards, Earning Cashback

How You Can Have a Good FICO Score Just One Year After Opening a Credit Card

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

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When I moved to the U.S. from my hometown of Hangzhou, in China, to pursue my undergraduate degree, the thought of establishing a credit history wasn’t even on my radar. I was, after all, an international student from China, where day-to-day credit card use had only recently caught on.

It wasn’t until I returned to the U.S. a few years later to pursue my master’s degree in Chicago that I realized I’d need to establish credit if I planned to launch my career in the States.

Just one year after I opened the card, I already had a solid FICO score – 720, to be exact. This score landed me safely in the “good” credit range, meaning I probably would not have trouble getting approved for new credit. I still had work to do if I wanted to get into the “very good” credit category, which starts at 740. But as a credit card newbie, I was not disappointed in my progress. 

Here’s how I did it.

I selected the right card for my needs

I wish I could say I diligently researched credit cards to choose the best offer and best terms, but honestly, I just got lucky.

Shortly before graduate school started, I visited friends in Iowa. When we were about to split the bill after dinner at a Japanese restaurant, I noticed that all my friends had a Discover card with a shimmering pink or blue cover. The Discover it® Student Cash Back was known for its high approval rate for student applicants, and had been popular among international students.

I thought, “Oh, maybe I should get this one, too.”

One of the friends sent me a referral link that very night. I applied and got approved quickly. We both received a $50 cash-back bonus after I made my first purchase — an iPhone — using the card through Discover’s special rewards program. I even received 5% cash back from the purchase.

Besides imposing no annual fee, the card had other perks, such as rewarding me with a $20 statement credit when I reported a good GPA (up to five consecutive years), letting me earn 5% cash back on purchases in rotating categories and matching the cashback bonus I earned over the first 12 months with my account. For me, it was a great starter card, but there are plenty of other options out there.

Check out our guide on the best credit cards for students.

I also could have explored other options of establishing credit, like opening a secured card, for example, which would have been a smart option if I hadn’t been able to qualify for the Discover it student card.

I never missed a payment

Despite my very limited financial literacy at the time, I attribute my strong credit score to the old, deeply ingrained Chinese mentality about saving and not owing.

I never missed payments, and I always paid off my balance in full each month, instead of just making the minimum payment. I didn’t want to pay a penny of interest.

Credit cards carry high interest rates across the board, but student credit cards generally have some of the highest APRs. This is because lenders see students like me — consumers without much credit history — to be risky borrowers, and they charge a higher interest rate to offset that risk.

Best Student Credit Cards June 2019

It wasn’t until much later that I learned payment history is critical to good credit. In fact, it is the biggest factor there is, accounting for 35% of my FICO score.

A Guide to Getting Your Free Credit Score

I was careful not to use too much of my available credit

My friends with more experience advised me to use as little of my available credit as possible. They warned me that overuse had hurt their credit scores in the past. This didn’t much sense to me, but I followed their advice, for the most part diligently.

I later learned this is almost as important as paying bills on time each month. Your utilization rate is another major factor in your FICO score. Credit experts urge cardholders to keep their credit utilization ratio below 30%. The lower, the better.

That means if you have three credit cards with a total available limit of $10,000, you should try to never carry a total balance exceeding $3,000, and you really should aim for much lower than that.

A Guide to Build and Maintain Healthy Credit

I beefed up my score with on-time rent payments

Keeping in mind the importance of not maxing out my credit card, I never considered paying my rent with the card. In fact, some landlords charge credit card fees for tenants who try to pay with plastic.

But I did find a way to establish credit by paying rent using my checking account.

I paid rent to my Chicago landlord through RentPayment, an online service. RentPayment gave me the option of having my payments reported to TransUnion, one of the three major credit-reporting agencies (the other two are Experian and Equifax). Because I knew I’d always pay bills on time, I signed up for the program.

This likely helped me improve my credit mix, another key factor influencing a credit score. The more types of accounts you show on your report, the better your score can be — if you make all your payments on time.

Yes, I made mistakes. This was my biggest one

My first foray into the world of credit wasn’t completely blip-free.

The only thing that hurt my credit, besides my short credit history, was that I had tried signing up for a Chase credit card, along with other ways to finance my iPhone, just a few days before I applied for my Discover card.

None of the other banks approved my applications, and my score went down at the very beginning, due to the number of “hard inquiries” against my credit report. Hard inquiries occur when lenders check your credit report before they make decisions regarding your application. Having too many inquiries in a short period of time can result in a ding to your credit score.

I’ve learned my lesson, though, and I’ll be cautious in the future when it comes to applying for a lot of credit in a short time period. Overall, it should be noted that you should not be afraid to apply for new credit — even when hard inquiries do hurt your score in the short term, it typically isn’t disastrous, and your score should recover fairly quickly as long as you are a responsible user of credit. Having more available credit can also help your utilization rate — as long as you don’t increase your charges, of course.

You can also check to see if you have prequalifed for any credit cards without triggering a hard inquiry.

If you’re new to the world of credit cards, consider taking the steps I outlined above, and you, too, may have a healthy credit score before you know it.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Shen Lu
Shen Lu |

Shen Lu is a writer at MagnifyMoney. You can email Shen Lu at [email protected]

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