Cosigners help borrowers’ approval ratings when it comes to getting a loan or refinancing. They’re especially helpful for young adults who are building up their credit history. However, is it possible to refinance loans without a cosigner? Yes! As long as you meet the refinance lender’s eligibility criteria, you can refinance student loans without a cosigner.

Requirements To Refinance Student Loans Without A Cosigner

Every lender sets their own requirements for refinancing student loans so eligibility criteria may vary from one lender to another. However, the basic requirements remain largely similar. Basic eligibility criteria include:

Good credit score

This is the first thing that lenders will look at. A good credit score will get you approved easily. Most lenders will want to see a score of 650 or more. If your score is under 650, you may not be approved for refinancing without a cosigner.

Low debt-to-income ratio

A low debt-to-income ratio indicates that only a small portion of your income goes towards paying your bills. This leaves enough to cover your monthly loan payments making you a good prospect for refinancing without a cosigner. Ideally your debt-to-income ratio should be under 50%. The lower the better.

Steady job with a decent, consistent income

This assures the lender that you will be able to afford the monthly payments on your own. They don’t need to worry about you missing payments because you are financially strapped. This eliminates the need of a cosigner.

Completed program with a graduate degree

Borrowers who have graduated are more likely to find good jobs with higher salaries. This makes them less likely to default on their loan payments, making a cosigner unnecessary. Many lenders will also require you to have attended a college located in the United States.

Student loans aren’t currently in default

Federal student loans are in default if they are unpaid for 270 days. Private student loans are considered in default if they are unpaid for 120 days. If your loans are in default, it means you are struggling to meet payments. To refinance without a cosigner, you must show the lender that you are up to date on your payments.

What Are Your Options If You Don’t Get Approved For Refinancing Without A Cosigner?

You have two options if no lender is willing to refinance your student loans without a cosigner.

1. First: look for a creditworthy cosigner. This could be anyone who meets the lender’s requirements.
2. Second Option: work on improving your finances, which increases approval chances.

How To Increase Your Chances Of Refinancing Student Loans Without A Cosigner

These are two things you can do to increase your approval chances for refinancing without a cosigner:

1. Make all loan and credit card payments on time every month. This will help improve your credit score.
2. Otherwise, look for ways to increase your income while at the same time work on reducing your expenses. This will boost your cash flow as well as your approval chances.

Remember, you can’t improve your credit score or your cash flow overnight. It takes time and persistence to see results and to be eligible to refinance student loans without a cosigner.