Find out How to Get Student Loans without a Cosigner

Finance Guides announces a new series of informative articles to explain consumers' options when seeking student loans without a cosigner.

There are many reasons for trying to get student loans without a cosigner. You might not have anyone with a credit score good enough to cosign the loan, or maybe you want to keep the responsibility of the loan on yourself. For what ever reason, options are available. Read on to find them out.

But where should you first run to if you want to get a loan? The government is your best friend when you want to take out student loans without a cosigner. In fact, many experts will advise you to stay away from private lenders for various reasons that we will talk about later on. You only get charged minimal interest rates and you are given plenty of time to pay the loan back in full.


Ways to Get Student Loans without a Cosigner from the Federal Government

Ask anyone who has ever taken out a student loan. Chances are they've taken out federal Stafford and Perkins loans. These are the most popular student loans, and for good reason. The interest rates are favorable to student borrowers. Not only are they smaller, but they're also fixed. Fixed interest rates, as the name suggests, have interest rates that do not vary over time. This will give you the opportunity to effectively plan your payment schedule. They also have more manageable payment terms. You only start payment on Perkins loans and subsidized Stafford loans after you graduate or leave school. Both loans have at least a 10-year repayment period. Federal loans are the safest way to get student loans without a cosigner.

Let's Talk about Stafford Loans

Let's first talk about the most common federal student loan - the Stafford loan. This is the most popular option when trying to get student loans without a cosigner. The measly 4.5% interest rate is its greatest appeal. You should also know that you may apply for subsidized Stafford loans if you can prove that you qualify for financial aid. If you do, interest on your loan will not accrue until you graduate or leave school. On the other hand, interest on unsubsidized loans will immediately be charged upon the payout.

To apply for a Stafford loan, you will need to complete a Free Application for Federal Student Aid (FAFSA), available online. Your borrowing limit will be determined by your school with the use of the information on your FAFSA. After receiving your first loan, you will need to fill out and file a Master Promissory Note (MPN). This is a document that gives you a legal obligation to pay back the loan. The terms and conditions of the loan are also in the MPN.

Another Option: The Perkins Loan

The other way to get student loans without a cosigner from the government is through Perkins loans. The fixed interest rate of the Perkins loan is also low - only 5%. As with subsidized Stafford loans, interest will not accrue until you start paying for the loan and you are given ten years to repay the loan in full. If you want to apply for a Perkins loan, just complete a FAFSA online. An MPN will also be required upon the first payout.

Learning How to Get Student Loans without a Cosigner from Private Lenders

Federal student loans should be enough in most cases, but what if you need more money than you can get with Stafford and Perkins loans? You go to private lenders. However, this is the riskiest way to get student loans without a cosigner. You have to understand that the goal of these companies is to profit, and that means making money out of you! Private lenders will generally offer higher interest rates compared to the government loans. You will also usually only be offered loans with variable interest rates. Your interest rate may go up or down, disabling you from planning out an effective payment scheme. Given all that, possibly the most disadvantageous feature of private loans are the penalties. You will have to work out an effective payment plan that you can stick to just so you can avoid paying the very high late payment fees.