If you’re on your way to college or graduate school but have been turned down for a student loan (even with a cosigner), it doesn’t mean you’re out of options to pay for school.
What to do if you’ve been denied a student loan
Private student loan lenders might deny applications for a variety of reasons, including credit and other financial issues. If you’ve applied for a loan on your own and had your application denied, you still have several paths to move forward.
Here are possible next steps:
- Complete the FAFSA.TheFree Application for Federal Student Aid (FAFSA)is used to apply for federal student aid, including federal student loans that, unlike private loans, don’t require a credit check. It’s worth filling out the FAFSA even if you don’t think you’ll qualify for student loans because you might qualify for other aid like grants or scholarships.
- Improve your credit.Your credit is an important part of qualifying forprivate student loans. 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).
- Find a cosigner.If you apply for a private student loan with a creditworthycosigner, 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.
- Look for scholarships and grants.There are countlesscollege scholarshipsandgrantsavailable to both undergraduate and graduate students. These are essentially free money for school that you don’t have to pay back, so it’s worth taking the time to apply for as many as you might qualify for.
Tip:
When in doubt, talk to your school’s 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.
Learn More:3 Best Private Student Loans That Don’t Require a Cosigner
What to do if you’ve been denied a student loan (with a cosigner)
It might feel like a double whammy if you’re denied a student loan with a cosigner — but not all hope is lost. Here are some strategies that might help you get that loan:
- Encourage your cosigner to check their credit.Sometimes credit reports contain errors, meaning your cosigner’s 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.
- Find a new cosigner.If your first cosigner doesn’t succeed, try again. Consider asking someone else with good credit — such as a parent, another relative, or a trusted friend — to cosign your loan. Just remember that cosigning can be a risk, so you might not get an enthusiastic response.
- Build your own credit.It takes time to build orrepair credit, so this isn’t a quick fix. But if you’ve 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.
- Apply for federal or other need-based aid.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.
Most federal student loans — including both Direct Subsidized and Unsubsidized Loans — don’t 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.
To qualify for a PLUS Loan, you can’t have an adverse credit history — which means your credit report must not contain negative information (such as defaults or bankruptcies) for the past five years. If you aren’t eligible for a PLUS Loan on your own, you could consider applying with an endorser who doesn’t have an adverse credit history, which is similar to a cosigner.
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.
Credible makes this process easy — 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.
4.94.9
Credible rating
Fixed (APR)
4.07% - 15.48%
Loan Amounts
$1,000 up to 100% of the school-certified cost of attendance
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
College Ave offers a wide range of in-school loans for nearly every type of degree. There are a number of repayment options, and borrowers can choose a unique eight-year repayment term. Plus, graduate, dental, and medical students receive extended grace periods.
You may get easy funding for multiple years — 90% of undergraduates are approved for additional student loans when they apply with a cosigner. However, it can be difficult to remove a cosigner for your loan later on, as you must complete at least half of your repayment term before becoming eligible. That’s significantly longer than some lenders, which may only require one to two years of payments before releasing a cosigner.
Interest rates
Fixed or variable
Minimum credit score
Does not disclose
Minimum income
Does not disclose
Loan terms
5, 8, 10, or 15 years for most borrowers (law, dental, medical, and other health profession students have up to 20 years)
Loan amounts
$1,000 minimum up to your school’s annual cost of attendance; lifetime limits depend on your degree and credit profile
Cosigner release
After half of the scheduled repayment period has elapsed
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. International students with a Social Security number and a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
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4.84.8
Credible rating
Fixed (APR)
4.09% - 15.66%
Loan Amounts
$2,001* to $400,000
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
Ascent offers several unique borrowing options that you don’t typically see with private lenders. In addition to traditional student loans for undergraduate, graduate, and medical programs, college juniors and seniors may qualify for its Outcomes-Based Loan — which doesn’t require established credit or a cosigner. Instead, Ascent reviews alternate factors such as your school, major, and GPA to determine your eligibility.
Ascent also offers a wide range of loan terms and repayment plans to choose from. You may even qualify for its Progressive Repayment plan, which allows you to start with small payments that gradually increase over time. Borrowers who use a cosigner can release them after as few as 12 payments, though international students don’t qualify for this option.
Interest rates
Fixed or variable
Minimum credit score
Does not disclose
Minimum income
Does not disclose
Loan terms
5, 7, 10, 12, 15, or 20 years
Loan amounts
$2,001 minimum up to your school’s annual cost of attendance; lifetime limits of $200,000 for undergrads and $400,000 for graduates
Cosigner release
12 months
Eligibility
Must be a U.S. citizen or DACA student enrolled at least half time at an eligible institution. International students with a qualified cosigner may also qualify. Applicants who can’t meet financial, credit, or other requirements may qualify with a cosigner.
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4.44.4
Credible rating
Fixed (APR)
4.43% - 14.04%
Loan Amounts
$1,000 to $99,999 annually ($180,000 aggregate limit)
Min. Credit Score
660
Check Rates
on Credible’s website
View Details
Overview
Powered by Cognition Financial, Custom Choice offers student loans for undergraduate and graduate students starting at $1,000. You can borrow up to $99,999 per year with a total aggregate limit of $180,000.
If you apply with a cosigner, you may be able to release them from your loan after 36 on-time payments. You can also receive a 0.25 percentage point discount on your interest rate by setting up autopay, as well as a 2% reduction of your principal balance after graduating.
Custom Choice doesn’t charge application, origination, prepayment, or late fees. It also lets you pause payments through forbearance if you qualify for its natural disaster or unemployment protection programs.
Interest rates
Fixed or variable
Minimum credit score
Does not disclose
Minimum income
Does not disclose
Loan terms
7, 10, or 15 years
Loan amounts
$1,000 to $99,999 per year (lifetime limit of $180,000)
Cosigner release
36 months
Eligibility
Must be a U.S. citizen or permanent resident at an eligible institution. You must also meet Custom Choice’s underwriting criteria for income and credit, or apply with a cosigner who does. Eligible noncitizens such as DACA residents can also qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
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4.34.3
Credible rating
Fixed (APR)
4.50% - 15.49%
Loan Amounts
$1,000 up to 100% of school-certified cost of attendance
Min. Credit Score
660
Check Rates
on Credible’s website
View Details
Overview
Sallie Mae offers the Smart Option Student Loan to undergraduate and graduate students. You can borrow up to your school-certified cost of attendance and apply just once annually to get the funds you need for the entire academic year. Plus, it may be easy to get reapproved for your future years of study — undergraduates have a 97% approval rate when they return to Sallie Mae with a cosigner.
Through Sallie Mae, you can find a variety of loans designed for specific needs, including loans for MBA programs, law school, bar study, medical school, medical residency, dental programs, dental residency, and other health profession programs. However, this lender no longer offers a career training loan.
Interest rates
Fixed or variable
Minimum credit score
Does not disclose
Minimum income
Does not disclose
Loan terms
10 to 15 years for Smart Option Student Loan; up to 15 years for law school and bar study loans; up to 20 years for medical school, medical residency, dental school, dental residency, and health professions loans
Loan amounts
$1,000 up to school-certified cost of attendance
Cosigner release
12 months
Eligibility
Must be a U.S. citizen or permanent resident enrolled in an eligible program. Noncitizens may qualify by applying with a cosigner who’s a U.S. citizen or permanent resident.
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Fixed (APR)
4.56% - 8.34%
Loan Amounts
$1,001 up to 100% of school certified cost of attendance
Min. Credit Score
670
Check Rates
on Credible’s website
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Overview
INvested is an Indiana company that offers affordable student loans exclusively to state residents. Loans are available to Indiana students and parents who can meet income and credit requirements, or who have an eligible cosigner. Borrowers can borrow as little as $1,001 or as much as the school-certified cost of attendance minus other aid.
INvested provides detailed information on eligibility so borrowers can quickly determine whether to apply for a loan — however, there’s no option to prequalify with a soft credit check. Cosigner release is also available after just 12 on-time payments, considerably shorter than many other lenders.
Interest rates
Fixed or variable
Minimum credit score
670
Minimum income
Does not disclose
Loan terms
5, 10, or 15 years
Loan amounts
$1,001 minimum, up to the school certified cost of attendance
Cosigner release
12 months
Eligibility
Loans are available to Indiana residents only. Borrowers must have a FICO score of 670 or higher, a 30% maximum debt-to-income ratio or minimum monthly income of $3,333, continuous employment over two years, and no major collections or defaults in recent years. Borrowers who do not meet income or credit requirements can apply with a cosigner.
Read full review
4.84.8
Credible rating
Fixed (APR)
5.35% - 7.95%
Loan Amounts
$1,500 up to school’s certified cost of attendance less aid
Min. Credit Score
670
Check Rates
on Credible’s website
View Details
Overview
Massachusetts Educational Financing Authority (MEFA) is a not-for-profit lender that offers low-cost undergraduate and graduate school loans to students nationwide. While only fixed-rate loans are available, interest costs may be lower than what you see with other private loans.
While you can apply with a cosigner to lock in the best rate possible, removing that cosigner later may be tough. Only one repayment plan allows cosigner release, and you must make four years of consecutive on-time payments and meet other credit and income requirements to qualify.
Interest rates
Fixed
Minimum credit score
670
Minimum income
Does not disclose
Loan terms
10 or 15 years
Loan amounts
$1,500 minimum up to school-certified cost of attendance
Cosigner release
48 months
Eligibility
Must be a U.S. citizen or permanent resident, enrolled at least half time at a degree-granting, nonprofit institution, and must maintain satisfactory academic progress. Must have no history of default on an education loan and no history of bankruptcy or foreclosure in the past 60 months. Applicants who can’t meet the minimum credit and income requirements may apply with a cosigner.
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4.84.8
Credible rating
Fixed (APR)
5.99% - 14.00%
Loan Amounts
$1,000 to $350,000 (depending on degree)
Min. Credit Score
720
Check Rates
on Credible’s website
View Details
Overview
Citizens offers a variety of student loan types, including loans for undergraduates, graduate students, and parents. Perhaps the most unique feature of Citizens student loans is the option for multiyear approval. If you qualify, you can apply once and borrow for future years with a more streamlined process that only involves a soft credit inquiry.
Student borrowers can defer payments while in school and for six months after graduating. You can also score a 0.25 percentage point reduction on your interest rate for setting up autopay, as well as an additional 0.25 percentage point loyalty discount if you or your cosigner already have a qualifying account with Citizens.
Interest rates
Fixed or variable
Minimum credit score
720
Minimum income
Does not disclose
Loan terms
5, 10, or 15 years for student loans; 5 or 10 years for parent loans
Loan amounts
$1,000 minimum, up to a maximum of $150,000 for undergraduate and graduate degrees; $250,000 for MBA and law; and $180,000 or $350,000 for health care student loans, depending on the degree type
Cosigner release
36 months
Eligibility
Must be a U.S. citizen or permanent resident enrolled at least half-time in a degree-granting program at an eligible institution. International students can apply with a cosigner who’s a U.S. citizen or permanent resident.
Read full review
4.84.8
Credible rating
Fixed (APR)
8.42% - 13.01%
Loan Amounts
$1,000 up to cost of attendance
Min. Credit Score
680
Check Rates
on Credible’s website
View Details
Overview
Education Loan Finance (ELFI) is a division of Tennessee-based SouthEast Bank owned by Education Loan Finance, Inc., a non-profit whose mandate is to provide access to higher education. ELFI launched in 2015 and offers undergraduate, graduate, and parent private student loans as well as student loan refinancing.
ELFI student loans and refinance loans are available to residents in all U.S. states including Puerto Rico. Borrowers can benefit from no application, origination, or prepayment fees. ELFI also offers flexible repayment terms and competitive rates, however there’s no cosigner release option and the lender doesn’t offer any discounts.
Interest rates
Fixed or variable
Minimum credit score
680
Minimum income
$35,000
Loan terms
5, 7, 10, or 15 years
Loan amounts
$1,000 - Cost of attendance
Cosigner release
A cosigner may not be taken off a loan, but the borrower can apply for a new loan without their cosigner.
Eligibility
All 50 states as well as Washington DC and Puerto Rico.
Read full review
All APRs reflect autopay and loyalty discounts where available | LightStream disclosure | SoFi Disclosures | Read more about Rates and Terms
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How to find a cosigner
Agreeing to cosign on a loan is a major responsibility and shouldn’t be taken lightly. If you miss your payments or default on the loan, your cosigner will be on the hook, and their credit will be damaged — all of this can also strain your relationship with your cosigner.
As you look for a cosigner, be prepared for someone to potentially say no or raise concerns before agreeing to do you this favor. If you’re ready to find a cosigner, here are four important steps to follow:
- Consider your options.A cosigner can be anyone with good credit — such as a parent, another relative, or a trusted friend — who is willing to share responsibility for the loan.
- Figure out your payment strategy.Before applying with a cosigner, make a plan for how you’ll handle repaying the loan if you’re approved — and what you’ll do if you can’t make a payment on time. Showing your cosigner that you’re ready to manage the loan could help ease concerns that they might have.
- Discuss the risks.Don’t shy away from talking about the risks of cosigning — instead, make sure both you and the cosigner are fully aware of the liabilities involved. Your cosigner should understand that they’ll be responsible for paying back your loan if you don’t keep up with payments.
- Use teamwork.After comparing loan options and choosing a lender, go through the application with your cosigner. This way, both of you will know exactly what you’re agreeing to. For example, you might want to consider applying forstudent loans that offer cosigner release, which will let you remove your cosigner from the loan in the future. To qualify for cosigner release, you’ll typically have to make on-time, consecutive payments for a certain amount of time as well as meet the underwriting criteria on your own.
What lenders look for in a student loan cosigner
While qualifying criteria for a student loan cosigner can vary by lender, here are some common requirements that you’ll likely come across:
- Good credit:Cosigners typically need good to excellent credit to be a cosigner — this usually means having a credit score of 700 or higher, though some lenders might accept lower scores than this.
- Stable income:Lenders want to see that your cosigner can afford to repay the loan if you can’t make your payments. Your cosigner should be prepared to provide documentation that illustrates their income — such as tax returns or pay stubs.
- Low debt-to-income ratio:Your debt-to-income (DTI) ratio is the amount you owe in monthly debt payments compared to your income. Lenders will likely consider a cosigner’s DTI ratio to ensure that they can reasonably fit an additional payment into their budget — in this case, your student loan payment if you fail to make payments.
Most students use a cosigner to get a private student loan
Most private student loans have a cosigner — so if you need one, you’re not alone.
How does a lender decide who qualifies for a private student loan?When reviewing loan applications, lenders typically look at a range of factors to make a decision. The most important of these are typically your credit score, income, and other debt payments you’re responsible for. Having a cosigner might make it easier for you to qualify.
If you’re shopping for a private student loan, be sure to consider as many lenders as possible to find the right loan for you. Credible makes this easy — you can see your rates in two minutes after filling out just one form.
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Meet the expert:
Taylor Medine
Taylor Medine is a Credible authority on personal finance. Her work has been featured on Bankrate, Experian, The Balance, Business Insider, Credit Karma, and more. She’s also the author of The 60-Minute Money Plan, a self-published intro to budgeting guide for people who hate budgeting.
