Co-Signer: Do I Need One? | Cosigners for Student Loans

Co-Signer: Do I Need One?

When applying to refinance your student loan or obtain a new one, the student loan company may require a co-signer. If this happens to you, don’t worry. Many applicants need a co-signer and it is typical. Here is what you need to know.

What is a co-signer?

If you have a limited credit history, you may need another creditworthy person (e.g., a parent, spouse, relative or friend supportive of your educational goals) to help you qualify for a loan. A creditworthy cosigner is one who has strong credit and an ability to repay the student loan.

The benefit of a co-signer is that a lender considers the income and credit history of both you and the co-signer, which improves your chances of being approved for a student loan. A co-signer is equally responsible with you for the student loan obligation. You can learn more about which lenders offer co-signers and other benefits.

What is a co-signer release?

Once you have been approved for a refinanced student loan or new student loan, your co-signer may not want to be financially responsible for your student loan. In this case, some student loan companies will release the co-signer from his or her obligations to repay the student loan. This typically occurs after you have made a certain number of on-time monthly payments.

After the co-signer is released from the student loan, you will have sole financial responsibility for the student loan. Student loan companies will also want to assess your credit to ensure that you can repay the student loan on your own. You can learn more about which lenders offer co-signer releases and other benefits.

What are the requirements for a co-signer release?

While each student loan company has its own underwriting criteria, you will have to be able to demonstrate to the student loan company that once your co-signer is released that you can repay the student loan on your own. Here are some of the most common requirements:

  • You must have graduated from college
  • You must have made a certain minimum number of student loan repayments, including principal and interest (e.g., 12-36 monthly payments)
  • You are employed and meet a certain minimum income threshold
  • Your credit meets the underwriting standards of the lender

Benefits of Co-Signer Release

Most of the benefits are for the co-signer who can be released.

  • No further obligations to repay the student loan (sigh of relief)
  • Credit score improvement
  • Funds available to help co-sign other student loans (e.g., other college-bound children)

The borrower benefits as well. Yes, it can be a little scary to have sole responsibility for paying off student loans. But, it can be a confidence builder to know that you are financially responsible and have increased your independence.

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These are our highest-rated student loan refinancing options for 2018.


Best Private Student Loans For 2018

Lender
Rates (APR)
Loan Type
3.94% - 12.78%
Graduate, Undergraduate

Overview

Variable Rates:3.94% - 11.19%
Fixed Rates:5.29% - 12.78%
Minimum Loan Amount:$1,000
Loan Terms:5, 8, 10, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:No

Details

  • Student loans available to graduate, bachelors and associates degrees
  • Deferment and forbearance options may be available
  • Grace period for undergraduates: 6 months
  • Grace period for graduate students: 9 months
  • Flexible student loan repayment options
4.92% - 10.01%
Graduate, Undergraduate

Overview

Variable Rates:4.92% - 10.01%
Fixed Rates:5.36% - 9.69%
Minimum Loan Amount:$5,000
Loan Terms:10
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Low rates from community lenders like credit unions and community banks
  • Get lower rates with a co-signer
  • Ability to pause payments for up to 18 months if you become unemployed
  • May consider your academic credentials to help you get a lower rate
  • If you repay 10% of your loan before your loan enters full repayment period, 1.0% APR is dropped from your current interest rate
4.04% - 14.87%
Cosigned Graduate, Undergraduate

Overview

Variable Rates:4.04% - 13.04%
Fixed Rates:5.81% - 14.87%
Minimum Loan Amount:$2,000
Loan Terms:5, 10, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Ability to start repaying loan while in school
  • Co-signer release after 24 consecutive payments
  • Financial hardship forbearance option
  • Non-U.S. citizens are eligible if they have a creditworthy co-signer who is a U.S. citizen or permanent resident
  • 1% Cash Back Reward to students on their loan principle amount upon graduation
5.70% - 14.00%
Non-cosigned Graduate, Undergraduate

Overview

Variable Rates:5.70% - 13.00%
Fixed Rates:7.32% - 14.00%
Minimum Loan Amount:$2,000
Loan Terms:10, 15 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Borrowers can qualify without a cosigner
  • A borrower’s major, graduation date and future earnings potential are considered
  • Borrowers who choose a fixed-rate option only can select a 10 year term
  • No minimum credit score or minimum income is required
  • Must have Satisfactory Academic Performance of 2.5 GPA, have Junior status or higher, and must be enrolled full-time
  • 1% Cash Back Reward to students on their loan principle amount upon graduation
3.74% - 8.91%
Graduate, Law, Medical, MBA, Dentistry, Nursing

Overview

Variable Rates:3.74% - 7.89%
Fixed Rates:4.50% - 8.91%
Minimum Loan Amount:$5,000
Loan Terms:5, 7, 10, 15, 20 years
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Student loans available to graduate, undergraduate and associates degrees
  • Law school, business school, medical school, dentistry school available at select schools.
  • Flexible student loan repayment options
  • Forbearance up to 1 year available
3.62% - 12.98%
Undergraduate, Graduate

Overview

Variable Rates:3.62% - 12.98%
Fixed Rates:5.74% - 12.87%
Minimum Loan Amount:None
Loan Terms:None
Origination Fees:No
Prepayment Fees:No
Co-signer Option:Yes

Details

  • Multiple repayment options
  • You may be able to increase your chance of approval if you apply with a credit worthy co-signer
  • Borrow up to 100% of the school-certified cost of attendance
  • Choose up to 120 tutoring minutes with Sallie Mae’s partner Chegg
  • Deferment and forbearance options available

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Co-Signer: Do I Need One?
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