Of all the different types of loans available, student loans are perhaps the easiest type to get without a cosigner. The reasons for this are numerous, but it is primarily because student loans tend to have very long terms, and private student loans have variable interest rates that can go quite high; in addition, these loans cannot be discharged in bankruptcy, and certain types of lenders have the ability to garnish your wages if you don't pay. For these reasons, student loans without a cosigner represent a very low risk to the lender itself, but a significant commitment for the borrower. In general, getting student loans without a cosigner simply requires filling out an application and maintaining enrollment in a verified college or university.
Student loans without a cosigner are available as an option to students who are enrolled at least part time in a qualified institute of higher education. Students applying for government loans, which may have lower, fixed interest rates, may be required to fill out a form detailing their income and tax information, as well as their parents' information if they are still claimed as dependents. Students applying for a private loan, which frequently have higher and variable interest rates, may simply need to fill out an application similar to any other personal loan. Anyone applying for a student loan will need to be at least 18 years of age.
Once the lender verifies enrollment with the school, and if the application is completed successfully, the funds will generally be disbursed. Some lenders send funds directly to the school, while others will send them to the borrower. Most allow the student to defer making payments until he or she graduates from school or is no longer enrolled at least part time. Of course, a good credit score and credit history can ensure lower interest rates on student loans without a cosigner, but many younger students starting college at age 18 might not have a credit history to speak of.
This is the reason some students choose to get a cosigner, such as a parent, on the loan with them. Even though it may be possible to get student loans without a cosigner, it can lead to much higher interest rates, particularly on private loans. A cosigner with a longer or better credit history can help to reduce this interest rate to a more manageable size. Anyone cosigning a loan, however, should understand that if the student fails to make payments, it will be up to them to make the payments.
