What’s a cosigner—and why might you need one on your student loan?

Alright, let’s imagine you applied for as many scholarships as you could, you submitted your FAFSA, and you qualified for some federal financial aid. What if you still don’t have enough money to pay for college? That’s when you might think about a private student loan. And for that, you’ll probably need a cosigner.

What is a cosigner?

A cosigner is an adult who agrees to be equally responsible for paying back a private student loan with you.

Unlike federal student loans (which come from the government), private student loans come from banks and financial institutions. Banks want to be sure their money will be paid back on time, with interest—that’s why private student loans require borrowers to have good credit. Credit is the ability to borrow money and pay it back with interest.

The thing is, many college students—especially incoming freshmen—haven’t had enough time or experience to build up a credit history for themselves. So, it’s helpful to have what lenders refer to as a “creditworthy cosigner” when applying for a private student loan.

Your cosigner might have already built up credit through habits like responsible credit card use or on-time mortgage payments.

What are the benefits of having a student loan cosigner?

Now that you know about cosigners, you might be wondering, what the real value of a cosigner is. What’s the advantage of applying for a private student loan with a cosigner?

Mostly there’s two big advantages of applying with a cosigner:

  1. You’re more likely to get approved for a private student loan if you apply with a cosigner because your cosigner probably has a credit score more in line with a lender’s requirements.
  2. You’ll probably qualify for a lower interest rate on your loan if your cosigner has a good or excellent credit rating. A lower interest rate means lower monthly payments for you—and less interest for you to pay over the life of the loan.

Your Student Loan, Your Way.

Variable rates from 4.98% - 12.79% APR

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Who can cosign a student loan?

Most of the time, cosigners are parents. But they don’t have to be. People like grandparents, older siblings, and spouses can be cosigners, too. Cosigners don’t even have to be related to you. Generally, there are three things needed to be a cosigner on a private student loan.

  1. Cosigners must meet their state’s age of majority—the age they’re considered an adult in their state. For most states, this is 18, but for some, it’s 19 or 21.
  2. Cosigners need to be U.S. citizens or permanent residents.
  3. Cosigners need to have a good credit history. The required credit score varies from lender to lender. But generally, lenders are looking for credit scores of at least 670 (on a scale of 300-850).

What does it mean to be a cosigner?

Being a cosigner on a private student loan—and helping someone get their education—is a generous thing to do. But it’s a serious commitment that both borrowers and cosigners need to understand. Cosigning is more than just signing a piece of paper (or more likely, an online PDF).

A cosigned student loan is a legal agreement. Cosigners agree to make sure that loan payments are made on time and that the loan is repaid in full, according to the original loan terms. To say it another way, cosigners are equally as responsible as the borrowers. And if payments are late and the loan becomes delinquent, it’s going to negatively affect both the borrower’s and the cosigner’s credit score.

How to talk to your parent (or anyone) about cosigning your student loan

Before taking out a loan, you and your potential cosigner need to talk honestly and make a plan for how the loan will get paid back. Here are a few things to think about:

  • Can you, as the borrower, truly handle all the payments?
  • What are your career plans for after college?
  • Does your cosigner plan to contribute financially—or are they relying on you?
  • Whose bank account will payments come out of each month?
  • How will you both handle things if a payment is late?

Everyone’s situation is unique, so you can make a plan that works for both of you. But the most important things are that you both know what to expect, and that the loan payment is made on time every month.

Can cosigners be removed from a loan?

Having a cosigner is super helpful. But someday, after you graduate, you might want to remove your cosigner from your private student loan. Or—your cosigner may want to be removed from your loan. This is called cosigner release because the lender is releasing the cosigner from their responsibilities.

To have your cosigner released, you need to submit an application to your lender. Along with the form there’s a few key things that are usually required:

  1. You must have proof of graduation or completion of your program.
  2. You had to have made a certain amount of on-time, full principal and interest loan payments. Most lenders require at least 12 consecutive months.
  3. You have to have steady income (AKA a job) to prove that you’ll be able to continue making the loan payments on your own.

And here’s good news: if you’ve been making consistent student loan payments for a while, you’ve probably been building up a credit history for yourself. That credit history will come in handy for other things too, like renting an apartment or getting a loan for a car.

A cosigner can help make college possible for you

When someone agrees to be your cosigner, it’s a big deal—with real consequences. Before taking out a private student loan with a cosigner, just make sure you both understand what it means and that you agree on how you’ll pay back the loan.

Got your cosigner on board? Grab them and start searching and comparing loans and lenders now!

 

Lender Rates (APR) Eligibility
Citizens logo.
6.98%-15.04%* Variable
5.99%-14.00%* Fixed
Undergraduate and Graduate
VISIT CITIZENS
Sallie Mae logo.
6.37% - 16.70% Variable
4.50% - 15.49% Fixed
Undergraduate and Graduate
VISIT SALLIE MAE
Credibe company logo.
4.98% - 16.85% Variable
4.07% - 16.49% Fixed
Undergraduate and Graduate
VISIT CREDIBLE
Lendkey company logo.
6.07% - 11.31% Variable
4.39% - 10.39% Fixed
Undergraduate and Graduate
VISIT LENDKEY
Ascent company logo.
6.24% - 15.85% Variable
4.29% - 15.76% Fixed
Undergraduate and Graduate
VISIT ASCENT
6.54% - 11.08% Variable
3.95% - 8.01% Fixed
Undergraduate and Graduate
VISIT ISL
Earnest company logo.
5.62% - 18.26% Variable
4.11% - 15.90% Fixed
Undergraduate and Graduate
VISIT EARNEST
4.98% - 12.79% Variable
8.42% - 13.01% Fixed
Undergraduate and Graduate
VISIT ELFI
College Raptor is not a loan lender and does not assume responsibility for suggesting a loan to a user who may not be eligible for it. Rates, terms, conditions, eligibility, approval, and other considerations are the decisions of the lenders and may vary depending on which lender or marketplace the user selects. We urge users to carefully consider and review all loan options and terms before committing to taking out a loan.

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