3 Options if Your PLUS Loan Application is not Approved

If your PLUS loan application has been denied because of adverse credit issues, do not lose hope just yet. There are three other options you can consider to come up with the difference between the actual cost of the education and what financial aid will provide. The options include: applying for a private loan, applying for a private loan with a cosigner, or asking a close relative to apply for a private loan.

Applying for a Private Loan

Private lenders will require a credit check just as a PLUS loan will, but depending on the lender, the credit requirements may be different. if you don't want to have the lender run your credit again unless you know for sure you will be approved for the loan, ask the lender about the general credit score required for approval. If you think your credit score will get approved, you can ask them to run your credit. If they don't approve you for the amount you want, you can always try for a smaller amount and worry about the rest later.

Apply for a Private Loan with a Cosigner

If the private loan gets denied, you will need a cosigner. The cosigner should have good credit. Talk to the lender about why your loan got denied and order a free copy of your credit report to determine the issues that are causing the loan to get denied. Your student will be in school for a few years at least, so working to fix these issues now, will help with potential education cost issues down the road. If the cosigner does not have good enough credit to get approved, you will need to find another cosigning borrower to try the loan application with.

Having a Close Relative Apply for a Private Loan

If you cannot find a decent cosigner or if there is a relative that has good credit and is willing to apply for a private loan on his or her own, this is your final option. Since parents and legal guardians are the only people who can apply for a PLUS loan for a student, any other relative must secure funding through a private loan. 

Student’s Credit

If the student is at least 18 he or she may be a

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