How to Get a Student Loan Without a Cosigner

Having a cosigner at the time of applying for a student loan is great. It makes the whole loan approval process smooth and stress-free for both you and the lender. But have you ever considered the downsides of taking a student loan with your mom or dad as a cosigner? Moreover, you are not unlucky if you don’t have a cosigner to help you get your student loan approved.

Here are a few Federal student loan options you have while applying without a co-signer.

1. Stafford Loan

Stafford loan is a federal loan offered to college students and professionals taking a vocational course in the university. Most students use the Stafford loans to pay for large expenses like tuition fees and accommodation. They are also known as direct loans. A student when accepted into a college or university accredited to accept federal loans have to fill up the Free Application for Federal Student Aid (FAFSA) form on the FederalStudentAid website.

There two types of Stafford loans:

a) Subsidized Stafford loan: The interest on subsidized loans is paid by the federal government for a certain period. This loan is only for a student who has extreme financial difficulties. The student is supposed to demonstrate that his/her poor financial condition. 

b) Unsubsidized Stafford loan: Most students would fit into this category. To get approved for an unsubsidized loan, you just need to fill up the FAFSA form. You are totally responsible to pay off this loan and no cosigner or government aid will be considered.

2. PLUS Loan

A PLUS Loan is a federal loan available to graduate and undergraduates students or their parents. Usually, PLUS Loans are used by the parent of the student. They can use this money for their personal expenses without any restrictions. But this loan can also be used by a student who doesn’t have a cosigner.

To apply for this loan you have to complete a FAFSA. You don’t have to worry about demonstrating a financial need to get approved for this loan. Just make sure that you are enrolled in a school that participates in the Federal Direct Student Loan Program.

3. FundingU-“Let your hard work co-sign for you.”

If for some reason, you do not qualify for the Federal loans(without a cosigner), you must take a look at the private lenders like FundingU. Offering student loans without a cosigner is what makes them the best private lender. In fact, it is their motto to let the student continue their education even if they don’t have a cosigner. You can check the eligibility in less than 30 seconds, and once approved, borrow $3,000-$10,000 each school year.

Summary

This might sound a bit morbid. But what will you do if your co-signer passes away and you find yourself completely unprepared to pay-off the loan? Also the risk of putting your parent in harm’s way as they now have to worry about your student loans on top of their retirement woes. A wise financial decision would be to apply for the student loan without a co-signer.

How to Deal with Outstanding Student Loans

Student loan debt is so bad that it’s now considered a crisis, with over $1.5 trillion owed among 44 million borrowers in the U.S. alone. These astronomical numbers are second only to mortgage debt and a number of students are suffering with the burden of paying off student loans well into adulthood.

People who graduate with student loans are often trapped in a vicious cycle of constantly being in debt because of an inability to keep up with payments. Even if a student manages to find a job right after graduating, the income alone is often not enough to keep up with student debt as well as the standard cost of living (especially when rent is high). In turn, young adults resort to relying on credit cards to pay for basic things like food, transportation, internet, etc., pushing them even further into debt.

Student loan

So what can be done to offset the burden of student loans? While there are options out there, you’re going to have to do a little leg work to find them.

Debt Consolidation

Instead of paying off all of your loans from multiple creditors and at different interest rates, you can consolidate your debt into one single monthly payment. The Credit Canada debt consolidation program is a great option for people who need a helping hand when it comes to managing their bills and money.

You’ll work with a certified Credit Counsellor who can combine all of your unsecured debt into one monthly payment. They will also negotiate with your creditors on your behalf to either stop or lower the  interest on your debt. From there, they will work with you to create a plan with a specific end date as to when you will pay off everything you owe.

The goal is to create a repayment plan where you pay off your debt rather than just paying the interest on your debt. With a lower or zero-percent interest rate on your debt moving forward, every payment you make goes towards paying down the principle rather than just covering the interest. This is extremely helpful for people who have more than just student loans to deal with because managing other debts can make paying off your student loan much easier and more manageable.

Budgeting

A number of students are familiar with living on a budget, and it’s something that many adults are going to have to keep up with if they want to pay off their debts. There are a number of useful tools out there for building a budget that works for you, but the most important factor is that you stick with it. Easier said than done, but a budget is the number one way to pay off your debt and secure money for yourself in the future.

Hold off On Major Life Changes

While it’s not something anyone wants to hear, a number of young adults are holding off on major life events like getting married or buying a home in order to save money. With the average cost of getting married sitting at over $30,000, it’s no wonder that couples hold off from tying the knot. Buying a home and settling down to have children is even more expensive, so it’s best that you have your debts in order before even thinking about making these huge financial commitments.

Despite the grim picture, there’s light at the end of the tunnel. Keep working towards your goals and you’ll eventually get there.

Weekly Round Up – April 04, 2014

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Weekly Round Up – September 6, 2013

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Debt

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The Seychelles islands in the Indian Ocean, better known for their pristine beaches and crystal  clear waters, are the most indebted nation in the world, according to a new report released on Monday. The “debt league” compiled data on government debt and private debt and looked at how much a country owes as well as how much it is owed.  According to this measure, the Seychelles tops the league of the most indebted nations, with national net debt at 152 percent of gross domestic product (GDP). In order of indebtedness, it is followed by Portugal, Ireland and Greece, countries which like the Seychelles in 2008, received international bailouts. Open this article [Read more…]