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Applying for a Student Loan Without a Cosigner

May 09, 2019 · 5 minute read

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Applying for a Student Loan Without a Cosigner

With the average cost of undergrad at $35,676 a year for a private education, it’s no surprise that many students will take out student loans to pay for their education. These student loans come in all shapes and sizes: federal or private, subsidized or unsubsidized, cosigned or not.

While the vast majority of students who take out private loans have a cosigner to guarantee the loan, that’s not an option for everyone. A cosigner—generally a family member or close friend—is someone who guarantees they will pay back your student loan if, for some reason, you can’t.

Typically, this is someone with good credit, who could step in if something goes wrong with your payments, but who trusts you to pay back the loan. You might need a cosigner to convince a lender to give you a student loan, because having a cosigner with more financial security or a better credit history may allow them to reduce the risk of lending. If you don’t have enough established credit to qualify for a loan on your own, turning to a cosigner, if possible, can also help you get approved at a better interest rate.

Typically, this is someone with solid creditworthiness who could step in if you’re unable to make your monthly payments. You might need a cosigner to qualify for a private student loan, because cosigner with more financial security or a better credit history can make you a stronger applicant in the eyes of the lender.

If you don’t have enough established credit to qualify for a private student loan on your own, turning to a cosigner, if possible, may also help you get approved at a better interest rate. However, not everyone has someone to cosign their student loans, and that’s okay too. There are plenty of ways to potentially qualify for both private and federal student loans without a cosigner.

Can You Get a Federal Student Loan Without a Cosigner?

The short answer is yes. The first step in qualifying for a federal financial aid package is to fill out the FAFSA (Free Application for Federal Student Aid).

You’ll submit your financial information and your parents’ information too, if you’re a dependent. Depending on your financial need, you’ll then be offered a combination of federal student loans —including subsidized and unsubsidized Direct Loans or PLUS Loans—and work-study programs.

Federal student loans do not require a cosigner, and they often have competitive interest rates. In addition to not requiring a cosigner, most federal student loans do not require a credit check .

Direct PLUS Loans , which are primarily offered to parents, or graduate or professional students, require a credit check. Don’t forget, there are limits on how much you can take out in federal loans. For example, dependent students cannot take out more than $5,500 as a first-year undergrad. And, no more than $3,500 of that money can be in subsidized loans. For more information on loan limits, check here .

Can You Get a Private Student Loan Without a Cosigner?

Even with federal loans, grants, and scholarships, you may still need to take out a private student loan to fully fund your education. To qualify for a private student loan, you generally have to be 18, a U.S. resident, and enrolled in school at least part time. Additionally, certain lenders may only approve loans if you are enrolled at schools that meet their criteria, which can vary from lender to lender.

You may also have to meet certain credit requirements (typically, a certain minimum credit score and length of credit history). If you don’t meet their credit requirements, most private loans require a cosigner. Those loans that are offered without a cosigner—and they do exist—often have higher interest rates. And unfortunately, the private loans offered to students with no cosigner typically come with specific qualifications.

For example, they could only be available for U.S. citizens or residents, or for older college students or graduate students. It truly depends on the lender. Private lenders and banks look at many factors, including credit history, to determine eligibility for a loan. One option, if you know you’re going to need a student loan without a cosigner, is to start building your credit as early as you can.

If you’re over 21, you could consider applying for a low-limit credit card. (The Credit Card Act of 2009 limits your ability to get a credit card without an income.) The advantage of a low-limit credit card is it can help keep you from going overboard on spending, while still allowing you to establish credit. If you pay your statement balance in full at the end of each billing cycle, you can potentially build credit up over time.

Applying for a Student Loan Without a Cosigner

Federal interest rates are set by Congress, the current rates for loans disbursed on or after 7/1/18 and before 7/1/19 are: 5.05% for undergraduate Direct subsidized and unsubsidized student loans, 6.6% for graduate Direct Loans, and 7.6% for PLUS Loans. Those interest rates won’t change for the life of the loan.

Private student loans without a cosigner can give you the flexibility to pay for school and additional school-related expenses like books. While a cosigner can help bring down the interest rate you qualify for, it also means the cosigner’s credit is impacted by this new loan, which could be a concern for your potential cosigner. If the loan is only in your name, you’ll also be able to build your own credit history once you start making payments.

Why It Can Help to Have a Cosigner on a Private Student Loan

Federal loans are one way to apply for student loans without a cosigner, since most simply do not require a cosigner at all. However, there are limits on how much you can borrow , as we mentioned above.

The downside of not having a cosigner for your private student loan is you might pay more in fees and/or interest. According to a 2017 study by LendEDU , interest rates were 1.49 percentage points less for borrowers with a cosigner than those without. Additionally, in the same study, 28.75% of applicants with a cosigner were approved for their private student loans, while only 4.90% without cosigners were approved.

That is definitely something to consider when deciding if you are going to apply for a private student loan with or without a cosigner.

Other Ways to Help Finance Your Education

Besides taking out federal student loans or private student loans without a cosigner, there are a few other options to help finance your education. There are many grants and scholarships available that you can apply for that you do not need to repay.

However, there may be certain eligibility requirements you need to meet in order to receive this “free money.” For example, there are scholarships for residents of certain states, or scholarships for certain majors.

Additionally, there are merit-based grants (grants available for students who reach a certain level of academic excellence) or need-based grants. The options are almost limitless for the grants and scholarships available. You can always search online or ask your school counselor for information on scholarships you can apply to and additional grants you may be eligible for.

Looking into Private Loans for College

If you find that your federal loans aren’t going to cover your education, SoFi private student loans might be just what you’re looking for. SoFi student loans come with no origination fees or late fees. You can apply entirely online—with or without a cosigner. And when it’s time to repay your loans, SoFi offers flexible payment options that fit your post-grad lifestyle.

Learn more about SoFi’s new private student loan offering.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
SoFi Student Loan Refinance
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

SoFi Private Student Loans
Please borrow responsibly. SoFi Private Student Loans are not a substitute for federal loans, grants, and work-study programs. You should exhaust all your federal student aid options before you consider any private loans, including ours. Read our FAQs. SoFi Private Student Loans are subject to program terms and restrictions, and applicants must meet SoFi’s eligibility and underwriting requirements. See for more information. To view payment examples, click here. SoFi reserves the right to modify eligibility criteria at any time. This information is subject to change.

External Websites: The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.


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