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3 things you can do if you’re denied for a private student loan

College • July 18, 2019 • Haley Costen


What you’ll learn

  • How to improve your chances of getting approved for a private student loan
  • Who you can turn to if your student loan application was denied


Getting denied for a private student loan can be a tough situation. I know because I’ve been there. One day you’re picking out dorm room décor and getting ready for orientation, and the next you’re wondering if you’re even going to make it to college.

Don’t panic. There are steps you can take. First, you need to understand why your student loan application was denied and what your next steps are.

    Why you were denied

    Every lender has their own requirements for getting approved for a student loan. Lenders may look at your employment history, credit score, debt-to-income ratio, and enrollment status at your school. One of the most common reasons why a student might not qualify for a private student loan is because they don’t meet their lender’s FICO® Credit Score criteria.

    Your FICO® Credit Score is a three-digit number that lenders use to measure how likely you are to be able to repay debt. If you’ve never borrowed or had to pay back money before, this number may not be high enough to qualify you for a loan. If you’re no stranger to borrowing, but have missed or been late on payments, your credit score may have also been impacted and can affect your chances of getting approved.

    Having a limited or less-than-awesome credit history can make getting approved for a private loan difficult, but there are steps you can take to move forward.

    What you can do

    1. Maximize scholarships, grants, and federal loans

      Before you even consider a private student loan, make sure you have utilized every option to pay for college that is out there. Make sure you’ve maximized free money options like college scholarships and grants, and considered federal loans. Planning for college can be overwhelming, but there are people and resources that can make it easier on you. Talk to your counselor and double check that you’ve taken advantage of everything available to you before applying for a private student loan.

    2. Consider a credit-worthy cosigner

      If you can’t qualify for a loan on your own, ask a credit-worthy person in your life to apply for a loan with you as a cosigner—someone who signs for the loan with you. A cosigner with a strong employment history and good credit may be able to help overcome your limited or negative credit history and so that together you qualify for the loan.

      Many students ask their parents, but if that’s not an option, you can also ask a guardian or relative to be your cosigner. In my case, my aunt cosigned the student loan that allowed me to attend college. Just make sure to have an open and honest discussion with your potential cosigner to ensure you’re making a responsible decision.

      It’s important to understand that your cosigner is equally responsible for your loan—that means if you miss a payment, it will affect your cosigner’s credit as well as your own. After you’ve met certain requirements from your lender, like making a certain number of on-time loan payments, you may be able to release your cosigner.

      There’s also another option for parents or creditworthy individuals that want and are able to help. If they want to take responsibility for paying for part of your education, they can take out a student loan in their name, often called a parent loan.

    3. Check your credit report

      Reach out to one of the three national credit bureaus (Experian, Equifax, and TransUnion) and view your credit report. You can check your credit for free with each of these bureaus once a year to get a better understanding about what is impacting your score. By keeping an eye on your credit score and starting with simple steps like making on-time payments and paying off your balances, you’ll build your credit health in no time.

      For students new to credit, talk to your parents about opening a secured or student credit card and practice good credit habits like keeping your balance low and never missing a payment.

    You have options

    Figuring out how you’re going to pay for college doesn’t have to be a challenge. Work on building or improving your credit and don’t be afraidto ask the people around you for help. If you’re still having trouble, don’t hesitate to contact your school’s financial aid office. They may have other suggestions to help you pay, like a tuition payment plan that allows you to pay your tuition bill in monthly installments. Don’t let a denial put a damper on your college journey.


Haley Costen is a copywriter at Sallie Mae. When she’s not writing, she’s most likely reading, road tripping, or counting down the days until the next Marvel movie comes out.


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Sallie Mae does not provide financial, tax, or legal advice and the information contained in this article does not constitute tax, legal, or financial advice. Sallie Mae does not make any claims, promises, or guarantees about the accuracy, completeness, or adequacy of the information contained in this article. Readers should consult their own attorneys or other tax advisors regarding any financial strategies mentioned in this article. These materials are for informational purposes only and do not necessarily reflect the views or endorsement of Sallie Mae.

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