Discover 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.

If you’re a self-supporting student, chances are you’re taking a part time job and the money you make is barely enough to get you through college. Maybe mom and dad send you money to pay for college but you find yourself needing more to pay for other expenses. What you need is to take out a student loans without a cosigner.

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. First is because federal student loans have very low fixed interest rates. Second is that federal student loans tend to have more flexible payment schemes.


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. In addition, you are not required to pay Perkins loans and subsidized Stafford loans until you either drop out or finish school. Federal loans are the safest way to get student loans without a cosigner.

Do You Know about Stafford Loans?

The Stafford loan is by far the most popular option to get student loans without a cosigner. It has a low fixed interest rate of only 4.5%. You should also know that you may apply for subsidized Stafford loans if you can prove that you qualify for financial aid. Subsidized loans will not accrue interest until you graduate. This is unlike unsubsidized loans which immediately accrue interest upon the first loan payout.

To apply for a Stafford loan, you will need to complete a Free Application for Federal Student Aid (FAFSA), available online. How much you can borrow will depend on the information you have in your FAFSA. Upon the first payout, you are required to 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.

What about Perkins loans?

The other way to get student loans without a cosigner from the government is through Perkins loans. They have a fixed interest rate of 5%. Interest will only start when you begin paying up, either upon graduation or leaving the school. You will be given ten years to completely cover all payments. To apply for a Perkins loan, all you need to do is to complete a FAFSA . An MPN will also be required upon the first payout.

Knowing Ways to Get Student Loans without a Cosigner from Private Lenders

If, for some reason, you are unable to get federal student loans, or you need more money than the Stafford or Perkins loans allow, you can get loans from 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! Comparing private lenders against government loans, you’ll notice that you’re being asked to pay bigger interest rates. In addition, most will only offer variable interest rates that change over time depending on the global economy. 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.