Guaranteed Student Loans Without a Cosigner
Most college students need financial aid to pay for their education. Financial aid can come from a variety of sources, including scholarships and grants, full or part time work, parental help, gifts and loans. Most private loan companies require a cosigner, unless you have an established credit history with fair to excellent credit. But it is possible to receive student loans without a cosigner.
Best Options for Student Loans Without a Cosigner:
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Federal Versus Private Student Loans
Federal student loans are provided and guaranteed by the United States Department of Education and awarded on an as needed basis. You do not need a cosigner or an established credit history to apply for a federal student loan.
The government does not guarantee private student loans. Banks and other financial institutions provide private loans to students who qualify. A cosigner with an established credit history is usually required. Undergraduate students almost always need a cosigner. Graduate and Professional students with a steady income and a good to excellent credit scores may be able to receive a private loan without an additional cosigner.
Best Options for Guaranteed Student Loans Without a Cosigner:
When applying for student loans without a cosigner, it may be helpful to start with guaranteed student loan programs.
Types of Federal Loans
- Direct Subsidized Loans
Direct Subsidized Loans are available through the U.S. Department of Education for undergraduate students who demonstrate financial need. The current interest rate is 3.4 percent (July 2012 – June 2013). Your college determines the loan amount, which cannot exceed your financial need. No cosigner or credit check is required.
- Direct Unsubsidized Loans
Direct Unsubsidized Loans are available through the U.S. Department of Education for undergraduate and graduate students. The interest rate is slightly higher than a subsidized loan, but you do not have to demonstrate financial need to apply for an unsubsidized loan. The current interest rate is 6.8 percent (July 2012 – June 2013). Your college determines the loan amount based on the cost of attendance and other financial aid you may receive. No cosigner or credit check is required.
- Direct Plus Loans
Direct Plus Loans are available through the U.S Department of Education for graduate and professional students. The interest rate is fixed at 7.9 percent, and a credit check is required. Your college determines the loan amount based on the coast of attendance and other financial aid you may receive. If you do not have an established credit history, you will need a cosigner.
- Federal Perkins Loans
Federal Perkins Loans are available to undergraduate, graduate and professional students who demonstrate extreme financial need. The interest rate is 5 percent and no cosigner or credit check is required. Perkins loans are provided through your school and they determine the amount you can receive.
Graduate and professional students may be eligible to receive up to $8,000 a year, with a maximum of $80,000 (including undergraduate loans).
Ways to Borrow Student Loans and Formalities Involved
Students on undergraduate and graduate program both do find it hard to meet their financial needs, hence they turn for help in terms of financial aid. As a first time applicant for financial aid it can be very hard to know who to turn to, to help you meet your education costs. This article seeks to enlighten a new applicant on the types of loans available for students and formalities involved.
Three Major Ways to Borrow Student Loans
Here I will explain to you the kind of people or institutions you can seek to consider as your financier for student loans.
Federal Government (Federal Student Loans)
This particular type of loan is funded by the federal government, and there are actually 3 types of loans under this category:-
Direct Plus Loans
This loans are for guardians of dependent college student (graduate and for professional students). This type of Credits help pay for learning costs up to the cost of participation short all other budgetary help. Interest is charged amid all periods.
Direct Plus Loans Qualifications
The life partner of the parent and your wage and resources were accounted for on the Free Application for Federal Student Help (FAFSA®) or would be accounted for if a FAFSA® were recorded
You should not have an unfavorable credit record
be the parent either biological or by adoption or at times, stepparent of a needy undergraduate student enrolled in any event half-time at a qualified school
be a graduate or expert/professional student enlisted in any event half-time at a qualified school in a program leading a graduate or expert/professional degree or certificate
Unsubsidized Stafford Loans (Direct Unsubsidized Loans)
This type of loan is the most prominent low interest loan offered by federal government. Stafford credits are for both undergraduates and graduate students, the credit is guaranteed by the government and offers adaptable reimbursement choices.
Qualifications for Stafford Loans
be selected in a program that prompts a degree or certificate granted by the school
accessible just to college undergraduates who have budgetary need
accessible to both undergraduate students and graduate or expert degree students
You are not required to demonstrate monetary need so as to receive this type of loan
Formalities to Receiving Stafford Loans
On the off chance that you pick not to pay the interest while you are in school and amid grace periods and forbearance duration, your interest will amass and be added to the principal credit amount
Your school decides the sum you can acquire in view of your cost of participation and other budgetary guides you get
You are in charge of paying the interest on a Direct Unsubsidized Credit amid all periods.
Direct Subsidized Loans
Direct subsidized loan is a little better if you consider these terms that it has, which is that:-The Department of Education in the U.S is responsible for paying the interest in this type of loan on the following term:-
when you are in school for at least half-time
During the initial six months after you leave school which is also alluded to as a grace period
amid the time of loan deferment
Qualification for Direct Subsidized Loans
This type of loans are accessible just to college undergraduates who have money related need
be selected in a program that prompts a degree or certificate granted by the school
Formalities Under Direct Subsidized Loans
Your school decides the sum you can get, and the sum may not surpass your budgetary need.
To first time applicant to federal student loans here are the fundamental reasons why you should consider federal loans first: - Federal student credit enable the borrower to change their reimbursement arrange even after they have taken out the credit. Also the borrowers needn't bother with a credit check to be considered aside from the Federal Plus credits. Finally might get that other Federal loans offer wage driven reimbursement arranges, where the rate of reimbursement depends on the borrower's earnings after school
Private Institutions (Financial Institutions)
A student can get financial aid from private institutions such as banks to fund your education costs if that bank or financial institution has such plans.
Qualification for Private Loans
Here almost anyone can apply for this type of loan so long as you meet the formalities provided you are assured of getting the loan from such private institution.
Formalities for Private Loans
Have good credit history – since this will be taken into consideration first.
The repayment plan agreed is final – this means that you cannot come later to renegotiate on how you wish to repay your loans.
You don’t have to fill FAFSA form
Private student loans seem more inviting because of this major reason, which is that they have FISCO Credit Scores which can allow you to follow up on your credit health quarterly without any charge.
This are loans which are taken by persons related to the student by offering something in their possession as a collateral. Examples are:-
Home equity loans
Here the guardians or parents allow the borrower to use equity of their home as a collateral, and if there is default on repayment means the house is sold for settlement of the loan.
The parent can simply take a lone for the student and later repay it, without involving the student.
401(k) Retirement plans
The guardian or parent can take a loan on behalf of the student and offer his/her retirement savings as a collateral in the event of default.