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As long as you meet lender requirements, it’s possible to refinance student loans without a cosigner. Refinancing means that a private lender bundles some or all of your loans, pays them off, and structures them into one new loan. A private lender can be a bank, school, credit union, or state agency. Federal student loans are funded by the federal government.

A cosigner is an individual with a good credit record who agrees to repay the loan if the primary borrower cannot. If you prefer to apply for a student loan without a cosigner, you may pay more for your loan over the long term through higher interest rates.

Keep reading for more information about student loan refinancing without a cosigner and what it involves.

What Is Student Loan Refinancing?

Student loan refinancing means that a private lender pays off your existing loans (which can be a mixture of private and federal student loans) and puts all of your loans under one roof. This means you don’t have to keep track of various loan payments.

Refinancing student loans allows you to lower your interest rates or extend your loan payoff. Your interest rate, which is a percentage of your principal amount borrowed, is the amount you pay to your lender in exchange for borrowing money. Extending your loan payoff means that you will increase the number of years you take to pay off your loan. It’s important to note that in this case, you will pay more over the life of your loan because you increase the number of years that you will pay for your loan.

You can refinance both federal and private student loans, but note that you must do so with a private lender. You cannot refinance any type of loan into a federal student loan. However, refinancing federal student loans means that you’ll lose access to federal protections such as federal loan forgiveness and income-driven repayment plans. Some lenders only refinance private student loans. Clearly, knowing if and when to refinance student loans is not a simple decision.

Benefits of Refinancing Student Loans Without a Cosigner

Take a look at the benefits of a student loan refinance with a cosigner and the drawbacks of refinancing student loans without a cosigner.

Keep in mind that if the student stops making loan payments, cosigners may end up paying back the student loan. Not making payments can damage both the student’s and the cosigner’s credit score. Your credit score is a three-digit number that shows a lender how well you pay down debt.

If this happens, it can result in a strained relationship. A student loan refinance without a cosigner may be the best option for all parties involved.

Recommended: Guide to Student Loan Refinancing

How To Refinance Student Loans in 4 Steps

Refinancing student loans without a cosigner typically follows these four steps:

1. Prequalify

By submitting some personal information, you can compare the rates among lenders. Lenders will run a soft credit check which won’t hurt your credit. Lenders will ask for your name, address, school you attended, degree achieved, total student loan debt, income, credit score estimate, and more. The information you need to provide varies from lender to lender.

Recommended: What’s the Difference Between a Hard and Soft Credit Check?

2. Get Multiple Rate Estimates

Each lender will likely give you several offers with various term lengths as well as fixed interest rates (those that don’t change) and variable interest rates (those that change depending on market fluctuations).

3. Complete the Application

Once you’ve chosen a lender and a loan, you can submit documentation that supports the soft credit check and any other information the lender needs, such as personal identification, pay stubs, or other income verification. You’ll undergo a hard credit check at this point.

4. Sign the Final Documents

Learn your final costs, or take a look at a student loan refinance calculator, to get a sense of your all-in costs so you know what you’ll have to pay every month.

What Refinancing Without a Cosigner Involves

Refinancing student loans without a cosigner involves special considerations:

Qualifying With Your Own Credit

Qualifying for a refinance with your own credit means that you aim to get a refinance using your own credit score. The credit score you need to qualify for a refinance will depend on a wide variety of factors, including your income and other information.

It’s important to put forth as high a credit score as you possibly can. The FICO® score range from 300 to 850 — 300 is the lowest and 850 is the highest credit score possible.

In addition to your credit check, you may also need to meet some basic eligibility requirements:

•   The legal age, or “age of majority,” in your state (typically 18)

•   A U.S. citizen, permanent resident, or non-permanent resident alien

•   Employed or have sufficient income from other sources

•   Graduated with an associate’s degree or higher from a qualified institution

Recommended: What is a bad credit score?

Debt-to-Income Ratio

When you get a refinance, a lender will also look at your debt-to-income (DTI) ratio. This is a percentage that tells lenders how much of your money per month goes toward monthly debts versus how much money you have coming into your household.

You can figure out your DTI by adding up your monthly debts and dividing that figure by your gross monthly income (your income before taxes). The result is a percentage, and the lower the percentage, the less risk you present to lenders. Learn more about why debt-to-income ratio matters in student loan refinancing with cosigner and without a cosigner.

Employment Status

In many cases, you must be currently employed, earn income from other sources, or have an offer of employment to start within the next 90 days in order to get a refinance. However, various lenders may have different employment stipulations. Check with your lender to learn more.

Credit History

In order to qualify for a refinance, a lender will look at your credit history, which includes your current and past credit accounts, the amount you owe, and your payment history. Your credit history reveals how responsibly you repay your debts. Credit scores come from information on your credit reports.

What If You Can’t Get Approved Without a Cosigner?

If you can’t get approved without a cosigner, you may want to look for a lender with an alternative credit check. Lenders may offer an alternative process, including simply taking a look at your grade point average, field of study, graduation prospects, and estimated future earnings to determine your eligibility for a refinance or loan. Keep in mind that these alternative requirements may require you to pay a higher interest rate for your refinance.

You may also consider going ahead with a cosigner and then later applying for a student loan cosigner release. A cosigner release means that cosigner is released from a loan as long as you meet certain requirements, such as a minimum payment requirement. Once released, the cosigner is no longer obligated to take care of your debt if you cannot repay your loan.

Alternatives to Refinancing Without a Cosigner

One of the best ways to circumvent the need for a cosigner is to work on improving your credit score. You can do that by paying off debt — paying down credit cards, paying off loans that have gone into arrears — and not taking out too many other types of loans. Your credit score will increase over time as you make positive moves.

SoFi Student Loan Refinancing

It’s possible to refinance student loans without a cosigner, but you may end up with less desirable rates than if you did opt for a cosigner. However, consider the pros and cons of applying with and without a cosigner, including the potential for a strained relationship if you fail to make timely loan repayments. Another important factor to weigh is how likely you are to benefit from the current federal student loan forgiveness plan, as well as the protections that come with federal student loans.

If you think refinancing might make sense for your situation, consider refinancing your student loans with SoFi. You can refinance online and pay zero fees, whether you choose to refinance student loans with a cosigner or not.

Photo credit: iStock/paulaphoto

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

Generally, student loan borrowers with a FICO® score of 670 or higher stand a better chance at meeting a refinancing lender’s eligibility requirement. But according to an August 2020 report by the Federal Reserve Bank of New York, the average credit score across all student loan borrowers was at 656 — just a few points shy of what’s considered “good” credit.

The minimum credit score permitted to refinance varies between lenders. Whether you already have strong credit or currently don’t meet the credit score needed to refinance, there are ways to move forward with your student debt.

Credit Score Range Required for Student Loan Refinancing

You typically need what FICO calls a good credit score, which is from 670 to 739, to get approved for a competitive refinancing rate and terms. Another commonly used credit scoring model is called the VanatageScore® which sets its “good” credit range at 661 to 780.

Some lenders have more flexible credit score requirements than others and set their minimum credit score requirement at 650 which is considered “fair.”

However, higher is usually better when it comes to credit scores, regardless of the scoring model that’s used. If your credit score exceeds these ranges, and is considered “very good” or “excellent”, you may be more likely to qualify for student loan refinancing.

Recommended: What Is a FICO Score?

Why Is There a Minimum Credit Score?

Your credit score gives lenders an at-a-glance synopsis of your borrowing habits. It’s based on information from your credit report — which is a highly detailed record of activity on all of your credit accounts — and a single score tells lenders how well you’ve managed your credit and repayment thus far.

Refinance lenders establish the lowest eligible credit score they’re willing to approve and lend to better their chances of getting paid back.

Benefits of a Higher Credit Score When Refinancing

Meeting the minimum credit score requirement of your preferred refinancing lender can help you get through the door in terms of approval. However, a higher credit score improves your access to a lower interest rate and favorable terms.

Your lender’s lowest advertised refinancing rate, for example, is reserved for borrowers who’ve demonstrated excellent credit. If you don’t have established credit, some lenders let applicants apply with a cosigner.

Typically, a cosigner is someone who’s close to you like a spouse, parent, or grandparent, and has a strong credit profile. By agreeing to cosign your loan, they’re accepting financial liability to repay your loan if you fail to make payments.

Refinancing without a cosigner means that only the primary borrower is responsible for repaying the loan. Having another person who’s legally responsible for the debt is another way that lenders protect themselves from potential default. As the primary borrower, not only can a cosigner improve your chances of approval, their good credit can help you qualify for a lower interest rate.

Recommended: Guide to Establishing Credit

Tips That Can Help Improve Your Credit

If your credit isn’t high enough to meet a lender’s minimum credit score requirement, there are a few tips on how to build credit over time.

Make Timely Payments

Making full, on-time payments on your existing credit accounts is the most impactful way to improve your credit. This factor accounts for 35% of your FICO credit score calculation and is at the forefront of what lenders look at when evaluating your eligibility.

Lower Your Credit Utilization Ratio

This is the ratio of how much outstanding debt you owe, compared to your available credit. Credit utilization ratio accounts for 30% of your FICO score. Keeping your credit utilization low can be an indicator that — although you have access to credit — you’re not overspending.

Maintain Your Credit History

A factor that’s moderately important when it comes to your FICO score calculation is the age of your active accounts. Keeping older accounts active and in good standing shows that you’re a steady borrower.

Keep a Balanced Credit Mix Without Too Many New Accounts

Having revolving accounts such as credit cards, and installment credit like student loans or a car loan shows you can handle different types of credit. This factor affects 10% of your credit score calculation which isn’t as huge as your payment history but a factor nonetheless.

Additionally, although a mix of credit can help your score, opening too many new accounts in a short period can adversely affect your credit score by 10%.

Other Eligibility Requirements for Student Loan Refinancing

Lenders want to ensure that their borrowers have the ability to repay the loan, based on the loan agreement. However, your credit score isn’t the only factor that determines your ability to make payments.

Other eligibility requirements that lenders consider might include your:

•   Age

•   Status in the country (e.g. US citizen, permanent resident, etc.)

•   Employment status

•   Income

•   School that you graduated from

•   Existing debt obligations

•   Loan amount

If your situation and credit score meets the lender’s requirements, you might be approved for a student loan refinance. Before refinancing your student loans, however, use a student loan refinance calculator to understand how much refinancing can save you.

Your Options if You Don’t Meet the Credit Requirements

If your credit isn’t eligible for student loan refinancing, you still have a few options to choose from.

•   Apply with a creditworthy cosigner. As mentioned above, securing a trusted cosigner who has strong credit can potentially help you with your refinancing goal. Keep in mind that any late payments on your loan may impact your credit and your cosigner’s.

•   Request an income-driven repayment plan. You can reduce your federal loan monthly payment by requesting to be put on an IDR plan. Depending on your plan, your term will be extended to 20 or 25 years, and your payment is calculated based on a percentage of your discretionary income and your family size. This option results in paying more interest overall.

•   Ask about forbearance. If you’re experiencing a short-term financial hardship, like a job loss or sudden financial expense that’s making it hard to manage your student loan payment, forbearance might help. It pauses your payments for a temporary period, during which time interest still accrues. Ask your servicer about how to request forbearance, or contact your private lender to see if it offers this option.

Applying for Student Loan Refinancing With SoFi

Your credit score is just one factor that lenders consider when applying for a student loan refinance, but it’s an important one. Increasing your credit score before refinancing, or finding a willing cosigner with strong credit, can help you reduce your interest rate and lower your total education-related costs.

Refinancing a private student loan is advantageous if you qualify for a lower interest rate. However, determining if you should refinance your federal student loans needs more consideration. Refinanced federal loans are converted into private loans rendering you ineligible for federal benefits and programs. For example, you’ll no longer have access to programs like Public Service Loan Forgiveness or income-driven repayment plan options that help reduce your monthly payment.

If you’re still convinced that refinancing is right for you, consider a SoFi student loan refinance. SoFi offers low-interest rates and significant savings for those who qualify. Checking your rate only takes only two minutes online.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.

SoFi Student Loan Refinance
SoFi Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891. (www.nmlsconsumeraccess.org). SoFi Student Loan Refinance Loans are private loans and do not have the same repayment options that the federal loan program offers, or may become available, such as Public Service Loan Forgiveness, Income-Based Repayment, Income-Contingent Repayment, PAYE or SAVE. Additional terms and conditions apply. Lowest rates reserved for the most creditworthy borrowers. For additional product-specific legal and licensing information, see SoFi.com/legal.

There are numerous things that investors can and perhaps should do before the clock strikes midnight on New Year’s Eve, such as maxing out retirement or college savings account contributions, and harvesting tax losses.

Read on to find out what should probably be on your investing checklist for the end of the year, what to consider tackling before your tax return is due in April, and how some simple moves this December can help set you up nicely for 2023 and beyond.

End-of-Year vs Tax-Day Deadlines

Before diving into the year-end investing checklist, it’s important to remember that there are a couple of key distinctions when it comes to the calendar. Specifically, though the calendar year actually ends on December 31 of any given year, Tax Day is typically in the middle of April (April 15, usually). That’s the due date to file your federal tax return, unless you file for an extension.

As it relates to your investing checklist, this is important to take into account because some things, like maxing out your 401(k) contributions must be done before the end of the calendar year, while others (like maxing out your IRA contributions) can be done up until the Tax Day deadline.

In other words, some items on the following investing checklist will need to be crossed off before New Year’s Day, while others can wait until April.

7 Things to Do With Your Investments No Later Than Dec. 31

Here are seven things investors can or should consider doing before the calendar rolls around to 2023.

1. Max Out 401(k) Contributions

Perhaps the most beneficial thing investors can do for their long-term financial prospects is to max out their 401(k) contributions. A 401(k) is an employer-sponsored retirement account, where workers can contribute tax-deferred portions of their paychecks.

There are also Roth 401(k) accounts, which may be available to you, which allow you to preemptively pay taxes on the contributions, allowing for tax-free withdrawals in the future.

You can only contribute a certain amount of money per year into a 401(k) account, however. For 2023, that limit is $22,500, and will increase to $23,000 in 2024. For those over 50, you can contribute an additional $7,500 in 2023, for a total of $30,000 in 2023. In 2024, the contribution limit rises to $23,000, with a $7,500 catch-up provision if you’re 50 and up, for a total of $30,500.

So, if you are able to, it may be beneficial to contribute up to the $22,500 limit for 2023 before the year ends. After December 31, any contributions will count toward the 2024 tax year.

2. Harvest Tax Losses

Tax-loss harvesting is an advanced but popular strategy that allows investors to sell some investments at a loss, and then write off their losses against their gains to help lower their tax burden.

Note that investment losses realized during a specific calendar year must be applied to the gains from the same year, but losses can be applied in the future using a strategy called a tax-loss carryforward. With 2022 having been a particularly rough year in the markets, this may be a beneficial tactic for investors to add to their year-end To Do list. Again, though, tax-loss harvesting can be a fairly complicated process, and it may be best to consult with a professional

3. Consider 529 Plan Contributions

A 529 college savings plan is used to save for education expenses. There are a few different types, but the main thing that investors should focus on, as it relates to their year-end investing checklist, is to stash money into it before January as some states allow 529 contributions as tax deductions.

There is no federal contribution limit for 529 plans in 2022 — instead, the limit is set at the state level. Gift taxes, however, may apply, which is critical to consider.

4. Address Roll-Over Loose Ends

Another thing to check on is whether there are any loose ends to tie up in regard to any account roll-overs that you may have executed during the year.

For example, if you decided to roll over an old 401(k) into an IRA at some point during the year, you’ll want to make sure that the funds ended up with your new brokerage or retirement plan provider.

It may be easy to overlook, but sometimes checks get sent to the wrong place or other wires get crossed, and it can be a good idea to double-check everything is where it should be before the year ends.

5. Review Insurance Policies

Some employers require or encourage employees to opt into certain benefits programs every year, including insurance coverage. This may or may not apply to your specific situation, but it can be a good idea to check and make sure your insurance coverage is up to date — and that you’ve done things like named beneficiaries, and that all relevant contact information is also current.

6. Review Your Estate Plan

This is another item on your investing checklist that may not necessarily need to be done by the end of the year, but it’s a good idea to make a habit of it: Review your estate plan, or get one started!

Your estate plan includes several important documents that legally establish what happens to your money and assets in the event that you die. If you don’t have one, you should probably make it an item on your to-do list. If you do have one, you can use the end of the year as a time to check in and make sure that your heirs or beneficiaries are designated, that there are instructions about how you’d prefer your death or incapacitation to be handled, and more.

7. Donate Appreciated Stocks

Finally, you can and perhaps should consider donating stocks to charity by the end of the year. There are a couple of reasons to consider a stock donation: One, you won’t pay any capital gains taxes if the shares have appreciated, and second, you’ll be able to snag a tax deduction for the full market value of the shares at the time that you donate them. The tax deduction limit is for up to 30% of your adjustable gross income — a considerable amount.

Remember, though, that charitable donations must be completed by December 31 if you hope to deduct the donation for the current tax year.

3 Things for Investors to Do by Tax Day 2024

As mentioned, there are a few items on your investing checklist that can be completed by Tax Day, or in mid-April 2024. Here are the few outstanding items that you’ll have several more months to complete.

1. Max Out IRA Contributions

One of the important differences between 401(k)s and IRAs is the contribution deadline. While 401(k) contributions must be made before the end of the calendar year, investors can keep making contributions to their IRA accounts up until Tax Day 2024, within the contribution limits of course.

So, if you want to max out your IRA contributions for 2023, the limit is $6,500. But people over 50 can contribute an additional $1,000 — and you’ll have until April to contribute for 2023 and still be able to deduct contributions from your taxable income (assuming it’s a tax-deferred IRA, not a Roth IRA).

Further, the limit will increase to $7,000 in 2024, with the same $1,000 catch-up provision, and some taxpayers may be able to deduct their contributions, too, under certain conditions.

2. Max Out HSA Contributions

If you have a health savings account (HSA), you’ll want to make sure you’ve hit your contribution limits before Tax Day, too. The contribution limits for HSAs in 2023 are $3,850 for self-only coverage and $7,750 for family coverage, though depending on your age and a few other factors, there may be some additional things to consider. For 2024, the contribution limits are $4,150 for self-only coverage and $8,300 for family coverage. People over 55 can contribute an additional $1,000 in both 2023 and 2024.

3. Take Your RMD (if Applicable)

If you’re retired, you may need to take a required minimum distribution (RMD) from your retirement account by the beginning of April next year, if it’s your first RMD. But if you’ve taken an RMD before, you’ll need to do so before the end of 2023 — so, be sure to check to see what deadline applies to your specific situation.

This generally only applies to people who are in their 70s, but it may be worth discussing with a professional what the best course of action is, especially if you have multiple retirement accounts.

The Takeaway

Doing a year-end financial review can be extremely beneficial, and a checklist can help make sure you don’t miss any important steps for 2023 — and set you up for 2024. That investing checklist should probably include things like maxing out contributions to your retirement accounts, harvesting tax losses in order to manage your tax bill, and possibly even taking minimum required distributions. Everyone’s situation is different, so you’ll need to tailor your investing checklist accordingly.

Also, it’s important to keep in mind that you may have until Tax Day in April to get some of it done — though it may be good practice to knock everything out by the end of the year. If you’re only beginning to invest, keeping this list handy and reviewing it annually can help you establish healthy financial habits.

You can also start next year off strong by opening an investment account with SoFi Invest, and using SoFi’s secure, streamlined app to buy stocks, ETFs, and more.

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