Federal Student Loans With No Cosigner
College costs rise every year and middle class income is declining, so students need to know how to get student loans without cosigner assistance. The best option is to apply for a Federal student loan through the Federal Direct Loan Program. This requires that the applicant demonstrate a need for assistance.
A Federal loan offers several advantages over a private loan. Perhaps the most important is that the interest rates are low, so repayment will be much easier. Students are able to get government student loans no cosigner required because they are based not on credit but on financial need.
The first step is to figure out how much money is needed. Use caution when taking out student loans. They will require repayment and cannot be charged off in a bankruptcy. The higher the amount a student borrows, the more difficult it will be to repay. Many students accumulate $100,000 in loan debt while obtaining a bachelor’s degree. This is a bad idea. Even at the 5% rate for a Perkins loan, this amounts to $417 per month just to pay interest, assuming repayment is started right away. Figure out the lowest amount possible to pay for college, and stay within that budget to avoid this.
Apply for Federal student loans without cosigner by filling out a FAFSA (Free Application for Federal Student Aid). This can be done most easily online at www.fafsa.ed.gov. The FAFSA also covers need-based student grants, which do not have to be paid back. In this economy, there’s nothing that makes a student happier than free money.
The FAFSA should be submitted as soon after January 1 as possible in order to obtain the best deal. Don’t wait until the deadline, which varies from state to state. Looking for student loans no cosigner should begin as early as possible.
Private Student Loans Without A Cosigner
Most students just out of high school will have a difficult time obtaining private student loans without the help of a cosigner. The reason for this is that they have insufficient or poor credit. Insufficient credit means that they have not taken out loans and made regular payments on them. This process is how credit is built. Banks hesitate to lend money to people who have not established a good record of repayment.
Other students may have taken a loan and not repaid it, or made late payments. These individuals have developed a bad credit score, which makes them an even higher risk in the eyes of a lender. Repairing a bad credit rating will require diligence and a good strategy.
To obtain a private student loans without cosigner, it is necessary to build or repair credit. The easiest way to establish a credit history is to accept an offer of a credit card either from a bank or from a store. Make some small purchases and pay them off. Do not allow a large balance to build up, but keep making regular payments of more than the required amount. Pay early or on time to keep building a good credit history.
Ensure You Have A Good Credit Rating
If you have bad (or no) credit, please refer to the student loans with bad credit section for more information. It is easy to check the credit rating by going to AnnualCreditReport.com. This is the only authorized site for the free credit report from the Federal Trade Commission. Every consumer has a legal right to obtain this free credit report each year. Many people are fooled into using private companies that charge fees. The FTC report is free and legitimate.
FTC allows a consumer to request reports from all 3 major credit reporting agencies at once, or to request each report individually. Spacing out the reports allows the consumer to check credit rating throughout the year. Request 1 report and take steps to improve the credit rating. Then request the next report, and so on.
Check the credit report to be certain there are no errors. If there is a discrepancy between the consumer’s records and the credit report, call the agency and find out how to get it resolved. This is a necessary step to repair credit.
Improving or building a credit store takes discipline and time. If debts have accumulated, the first step is to pay them down. If a high balance has accumulated on a credit card, this needs to be paid and the card not used again so that the credit remains available. This will improve the credit score.
Taking a new loan for a small amount and paying it off will also help to build a good credit score. Smaller loans are easier to obtain than larger ones. Sometimes a cosigner is needed for the first loan. After good performance on one loan, it may be possible to get the next loan without a cosigner.
There is no easy way to obtain private student loans with no cosigner. Creating a plan for building or repairing the student’s credit and following through may help. Another possibility is to obtain a loan through a credit union if the student is a close relative of a member in good standing. Some credit unions offer loans to family members at a fairly reasonable interest rate.
Whichever method is used to obtain the loan, keep in mind that it must be paid back. Take out the smallest amount possible, and read the fine print to be sure it is a good deal. Obtaining a student loan with a low interest rate will help in the quest for a marketable degree.