Do you Need a Co-signer to Get a Loan for School?
It’s going to be tough for you to get loans that don’t require a co-signer but it is possible, in this article you will learn how to get a private student loan with no co-signer. Now, why are co-signers hard on people? Well, because the co-signer is equally as responsible as the borrower when it comes to paying back that student loan debt and that can be hard because if the student doesn’t make payments it could hurt the other persons credit and even in crazy scenarios like if the student dies the co-signer is a hundred percent responsible for that loan. So whenever it’s possible, I always try to recommend people get a private student loan with no co-signer. Now I realize it’s not realistic for many people, and we’re going to talk about why, but let’s dive in, and we’re going to show you how to qualify for a private student loan with no co-signer.
How to Qualify for a Student Loan With no Co-signer
To start with, private student loans operate much like auto loans or mortgages. So with a private student loan, the collateral on the student loan is your earnings. So you can get a higher limit because you’re young. The banks or the lenders think that you’re going to make a lot more in the future. Then based on US law, they know that you can’t really get rid of these loans in bankruptcy, and that there’s a lot of ways for them to collect on this debt, so it’s a very safe loan for banks to lend to you but that doesn’t mean they’re great for you. So when lenders are looking to lend a private student loan, they’re looking for three criteria. Click here!
Criteria Lenders Look at
- First off, you have to be a US citizen, the reason going back to that law piece they want to be protected so you have to be a US citizen.
- Second, most lenders are going to want to see a good credit history. Now, this is hard for when you’re 18, 19, and 20 because you don’t really have a credit history, but if you want a private student loan with no cosigner you need to have a good credit history, a score of 700 or higher. They want to see payments made on time for a couple of years so that’s a challenge. One way to get around this is to maybe have you added as an authorized user on your parent’s credit card because now their credit history on that card becomes your credit history on that card and that can help.
- Most banks and lenders for private student loans offering no co-signer loans want to see income as well. On average they want to see about $25,000 a year in income. Now summer jobs and working on the side all that income counts it just need to be on your tax return so no under-the-table money. But if you’re not making about $20,000, $25,000 a year, you’re going to have a hard time combining that with your credit history to get a private student loan with no co-signer.
Now, if you’re going to get a private student loan, and you end up having to get a co-signer, at least do it the right way. The big thing is to make sure you set rules and boundaries for each other about making payments on time, and we highly recommend that whomever the co-signer is gets a life insurance policy on the borrower so that if anything were to happen to them, the loan can be paid off. So hopefully that helps you understand what it takes to get a private student loan with no co-signer. Click here for more information: https://www.bbc.com/news/education-49197015