For students seeking financial assistance with no cosigner, college loans can be difficult to obtain. Federal Direct Student Loans and Federal Family Education Loans do not base loan approval on past credit history.
In addition, students applying for government aid or loans will not require a cosigner, college loans under Federal Direct Student Loan Program especially. In contrast, private loans require a good credit history and frequently a cosigner as well. See also this interesting video:
Fortunately, due to the popularity of the Internet, a number of virtual loan programs have sprung up to offer college students even more ways to apply for and obtain no cosigner college loans.
Some of these programs, called peer-to-peer loans include:
• Virgin Money USA
Stafford loans and Perkins loans under the Federal Direct Student Loan Program, however, are just one part of no cosigner college loans. Unfortunately, Stafford loans only cover a small portion of students’ total tuition. Stafford offers very low lending amounts, for example, an average of $4500.00 per all grade level students for one year of college, and for students looking for no cosigner college loans; this only solves a small portion of their financial problems. Students with no credit history will find other funding is necessary.
For parents who cannot afford to pay a student’s tuition and have poor credit, parents must assume the student will obtain the grants and loans necessary to pay for all four years of college with no cosigner college loans. Although the parental income and assets may improve as dependents reach college age, parents may still not be able to afford a four-year education, so the student is forced to seek no cosigner college loans from a variety of sources.
Some parents can apply for PLUS Parent Loans, but good credit is required for approval. Unfortunately, since Stafford Loans and Perkins Loans from the Direct Program cap the amount the government provides, many students find the Direct Program loans to be a helpful, yet painfully insufficient, choice for no cosigner college loans.
Some of these programs do not require a credit history per se, but require the student has no bad credit history, and will take into account real-life factors such as GPA and intended majors. People across the world provide funding to a student they deem trustworthy of lending money. This is an innovative and useful strategy in a world where relatives, families, and friends can no longer be relied upon to provide college funding.
Of course, students choosing a peer-to-peer loan should fully understand terms of agreement including repayment stipulations, future credit implications, and potential financial hardship forbearance clauses. Entering into any loan agreement without a comprehensive understanding of the terms of the loan is not only prove unwise, but financial and personal information involved in such transactions places students in a precarious position should malice develop between the lender and borrower.
One point students must be wary of is obtaining too much credit through credit card companies, which propose easy money access to all college students. The lure of easy money may be attractive, but paying back the money, plus the exorbitant interest rates ranging averaging 20% to 28%, can bring student finances closer to bankruptcy even without the burden of other future student loans. While it may seem impossible for students to put themselves through college, face no cosigner college loan repayments, and address all of the other expenses entailing supporting oneself through four-years of college, it is important to remember there is a future beyond the college walls.