Student loan approval
What if my student loan application is denied?
It is possible that your application for a private student loan may be denied. Don't panic or think this means you won't be able to attend college. There are still plenty of possible avenues to pursue. If your parents are helping you, they may consider paying for college with a federal loan designed for parents, the PLUS loan. But you can also apply for a private student loan with a cosigner.
If you apply for a private student loan on your own, without a cosigner, and are denied, it's probably because you have insufficient personal credit history, as is typical for someone of your age. You'll simply have to find a qualified cosigner and re-apply. That cosigner could be a parent or other guardian, a grandparent, an older sibling or perhaps a favorite uncle or aunt. By cosigning your loan, they're agreeing to personally step in and help repay the loan in the event you cannot. At the same time, it doesn't remove your role as the primary borrower. You and the cosigner are equally responsible for repayment.
On the other hand, if you apply with a cosigner and are denied a private student loan, you can find another qualified cosigner and re-apply. The good news is that there are benefits to serving as a cosigner and some lenders do offer the option to be released as a cosigner after a certain period of on-time payments. For example, our Citizens Bank Student Loan has a cosigner release option available after 36 consecutive on-time payments of principal and interest.
How to help prevent student loan denial by establishing good credit
Here are a few pointers on how you can establish good credit, so that in the future you'll possibly qualify on your own:
- Start out small: Establishing good credit takes time. Start with one credit card.
- Pay on time, every time: Never miss a monthly payment.
- Don't pay down, pay off: Pay your credit card bills in full each month.
Learn more about flexible student financing options from Citizens Bank
Review our other helpful student loan information to make sure you're prepared for the start of college. If you want to learn more about our Citizens Bank Student Loan or have questions about paying for college, call an Education Finance Specialist at 1-800-708-6684, and we'll help walk you through the process.