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- What to do if you\u2019ve been denied a student loan<\/a><\/li>\n
- What to do if you\u2019ve been denied a student loan (with a cosigner)<\/a><\/li>\n
- How to find a cosigner<\/a><\/li>\n
- What lenders look for in a student loan cosigner<\/a><\/li>\n
- Most students use a cosigner to get a private student loan<\/a><\/li>\n<\/ul>\n
<\/a><\/p>\n
What to do if you\u2019ve been denied a student loan<\/h2>\n
Private student loan lenders might deny applications for a variety of reasons, including credit and other financial issues. If you\u2019ve applied for a loan on your own and had your application denied, you still have several paths to move forward.<\/p>\n
Here are possible next steps:<\/p>\n
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- Complete the FAFSA. <\/b>The Free Application for Federal Student Aid (FAFSA)<\/a> is used to apply for federal student aid, including federal student loans that, unlike private loans, don\u2019t require a credit check. It\u2019s worth filling out the FAFSA even if you don\u2019t think you\u2019ll qualify for student loans because you might qualify for other aid like grants or scholarships.<\/li>\n
- Improve your credit.<\/strong> Your credit is an important part of qualifying for private student loans<\/a>. If you work to raise your credit score, you can improve your odds of getting approved on a future application. The most important factors that make up your credit score are making on-time payments and keeping your revolving account balances low (such as credit card balances).<\/li>\n
- Find a cosigner.<\/strong> If you apply for a private student loan with a creditworthy cosigner<\/a>, their good credit could help you get approved. Having a cosigner might also mean get you better loan terms than you’d get on your own, such as a lower interest rate. But keep in mind that this also means your cosigner is responsible for paying the loan back if you stop making payments.<\/li>\n
- Look for scholarships and grants.<\/strong> There are countless college scholarships<\/a> and grants<\/a> available to both undergraduate and graduate students. These are essentially free money for school that you don\u2019t have to pay back, so it\u2019s worth taking the time to apply for as many as you might qualify for.<\/li>\n<\/ol>\n
Tip:<\/strong> When in doubt, talk to your school\u2019s financial aid office to learn more about your options. They might even have connections to land you a part-time job on campus or know about scholarships you might not have found elsewhere.<\/div><\/div>\nLearn More: 3 Best Private Student Loans That Don\u2019t Require a Cosigner<\/a><\/i><\/b><\/p>\n
<\/a><\/p>\n
What to do if you\u2019ve been denied a student loan (with a cosigner)<\/h2>\n
It might feel like a double whammy if you\u2019re denied a student loan with a cosigner \u2014 but not all hope is lost. Here are some strategies that might help you get that loan:<\/p>\n
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- Encourage your cosigner to check their credit.<\/b> Sometimes credit reports contain errors, meaning your cosigner\u2019s credit score might not be correct. If your cosigner finds any mistakes and files a dispute with the appropriate credit bureau, their credit score could go up.<\/li>\n
- Find a new cosigner.<\/b> If your first cosigner doesn\u2019t succeed, try again. Consider asking someone else with good credit \u2014 such as a parent, another relative, or a trusted friend \u2014 to cosign your loan. Just remember that cosigning can be a risk, so you might not get an enthusiastic response.<\/li>\n
- Build your own credit.<\/b> It takes time to build or repair credit<\/a>, so this isn\u2019t a quick fix. But if you\u2019ve run out of other financing options, working on your own credit might be your best bet. Some potential ways to improve your credit include paying all of your bills on time and paying down credit balances (or better yet, paying them off each month) to establish a positive credit history and reduce your credit utilization.<\/li>\n
- Apply for federal or other need-based aid.<\/b> If your options for getting a private student loan with a cosigner are limited, federal or other need-based student aid may be your best financial resource since your credit is usually not a deciding factor.<\/li>\n<\/ul>\n
Keep in mind:<\/b> Most federal student loans \u2014 including both Direct Subsidized and Unsubsidized Loans \u2014 don\u2019t require a credit check. However, Direct PLUS Loans do. These loans come in two categories: Grad PLUS Loans for students who want to pay for grad school and Parent PLUS Loans for parents who want to cover education costs for their child.<\/p>\nTo qualify for a PLUS Loan, you can\u2019t have an adverse credit history \u2014 which means your credit report must not contain negative information (such as defaults or bankruptcies) for the past five years. If you aren\u2019t eligible for a PLUS Loan on your own, you could consider applying with an endorser who doesn\u2019t have an adverse credit history, which is similar to a cosigner.<\/div><\/div>\n
If you decide to reapply for a private student loan, be sure to shop around and compare your options from as many lenders as possible to find the right loan for you. Keep in mind that several private lenders offer loans to borrowers with less-than-perfect credit, which could help you get approved.<\/p>\n
Credible makes this process easy \u2014 you can compare your prequalified rates from our partner lenders in the table below in two minutes. Keep in mind that while some of these lenders have high required minimum credit scores, you might be able to qualify if you apply with a creditworthy cosigner.<\/p>\n\n
- Find a new cosigner.<\/b> If your first cosigner doesn\u2019t succeed, try again. Consider asking someone else with good credit \u2014 such as a parent, another relative, or a trusted friend \u2014 to cosign your loan. Just remember that cosigning can be a risk, so you might not get an enthusiastic response.<\/li>\n
- Improve your credit.<\/strong> Your credit is an important part of qualifying for private student loans<\/a>. If you work to raise your credit score, you can improve your odds of getting approved on a future application. The most important factors that make up your credit score are making on-time payments and keeping your revolving account balances low (such as credit card balances).<\/li>\n
- What to do if you\u2019ve been denied a student loan (with a cosigner)<\/a><\/li>\n
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