You can refinance without a co-signer if you meet the lender’s underwriting criteria. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.
First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.
UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.
How to refinance student loans without a co-signer?
If you have a student loan with a co-signer and want to refinance it, there are a few factors you need to know:
Credit score: You’ll need to get approved on your own creditworthiness and meet the lenders’ eligibility requirements.
Credit history: This will look at how responsible you are with your debt payments over a period of time. You’ll need a good credit history without any missed payments.
Deb-to-income ratio (DTI): This ratio looks at your total debt payments divided by your income. You’ll more likely need a DTI of less than 50%.
Employment: The refinancing companies want to know that you can afford the loan you are taking out. You’ll need a stable and minimum income to qualify.
Complete the application: Once you’ve decided on a lender, go to its website and complete the online application. You’ll be asked to provide your name, address, employer, and Social Security number. You may also need to upload copies of documents such as your W2 or tax returns.
Manage your payments: If you’re approved for refinancing, make sure you understand how different payment plans work. Some plans change the number of payments per year but still require the same amount over time. Others change the amount due each month and reduce the number of payments. Some lenders allow you to vary payment amounts from month to month.
Can you consolidate student loans without a co-signer?
If you consolidate with a private lender, it is referred to as refinancing. In the case of federal student loans, refinancing is usually referred to as consolidation.
You can consolidate student loans without a co-signer, but not all lenders will allow it. In most cases, the credit union or lender will require you to have a co-signer because they want to be sure they can collect the debt if you default. The loan provider may not need a co-signer if you meet their eligibility requirements.
Keep to note, when you consolidate, you will do it through the Department of Education and maintain your federal benefits. When you refinance, you’ll do it through a private lender and lose federal benefits, but you’ll save money if you have a lower interest rate.
How does co-signer release work?
A co-signer release is a process of having a co-signer removed from the loan and is no longer responsible for it.
The process of obtaining a co-signer release depends on whether or not you have been making regular payments on time and in full each month. Including, you’ve met the lender’s requirements of not having a co-signer anymore on the loan.
Pros of not using a co-signer when refinancing
Here are some of the pros of not using a co-signer when refinancing:
No need to find one: In some cases, you might not know any co-signer with good credit, so you avoid the headache of finding one.
Relationship: Getting your loan co-signed might impact your relationship if things go the wrong way. Your co-signer will be responsible for repayment if you have financial difficulties or if something else goes wrong, and your relationship could suffer.
Only you’re responsible: You’re the only one that will be responsible for the refinanced loan, so you can focus on repaying without worrying about negatively impacting your co-signer.
Cons of not using a co-signer when refinancing
Here are some of the biggest cons of not using a co-signer when refinancing:
Hard to qualify: If you don’t meet the lender’s requirements from income to credit, it’ll be difficult to refinance without a co-signer.
Not get the best rates: If you have a co-signer, you can more likely get a lower interest rate on your loan because the lender will be more confident in your ability to pay back the loan.
How to choose the best student loan to refinance without a co-signer
Here are factors to consider for choosing the best student loan to refinance without a co-signer:
Interest rates: Before shopping around for a student loan refinance lender, look at what other lenders are offering. While some lenders offer lower interest rates, others offer more flexible terms that better suit your needs. You don’t want to go through the process of applying only to learn that another lender has better terms or conditions suited to your financial situation. Also, take into consideration the costs of the loan from origination to application fees. Some lenders will show a low-interest rate but have higher costs that end up costing more over time.
Credit score: Your FICO score is one of the most important factors in whether a lender will approve your application or not. Look at your free credit report from each of the three major credit bureaus — Experian, TransUnion, and Equifax — and check for errors that could drag down your score.
Variable vs. fixed rates: Variable rates fluctuate depending on market conditions and can change monthly or annually based on market trends. Fixed rates stay consistent over time and have fixed payments that won’t change unless there are mitigating circumstances, such as missed payments or late fees. You’ll have to decide what will fit your budget the best.
Loan fees: The first thing to consider is the cost of refinancing your student loans. You want to find a lender that has low fees or ideally none. Make sure to check out all the different ways your lender charges before deciding on one.Â
