I Need a Cosigner
If you applied for a private student loan and were notified you needed to apply with a cosigner, you’re not alone. Over 90% of private student loans include a cosigner. So really, you’re not the only one. Here’s how to think about your next steps.
A cosigner is another individual, usually a parent or guardian, who is willing to take responsibility for the loan alongside the primary borrower. The cosigner is equally responsible for the loan in the event the student borrower is unable to repay it.
Why do I need a cosigner?
Private student loan lenders typically require a credit and income check in order to approve a borrower for a loan. Lenders use this information to determine the borrower’s ability to repay the loan.
Given that most borrowers are fresh out of high school or in their early twenties, many do not have a credit score, or if they do, their score is low. People build credit history through credit cards, mortgages, car loans, etc., and many students have not encountered these yet at this stage in their life. Their income is usually limited at this stage in their life too.
As a result, student borrowers are often prompted to apply with a cosigner – someone who does meet the criteria – in order to be approved.
Who should I ask to be my cosigner?
When thinking about who to ask to be your cosigner, ask yourself this question – “Who do I know will be sitting at my graduation cheering me on as I walk across the stage to receive my diploma?”
By starting here, you will identify individuals who care greatly about your success and achievement. Parents and guardians are a great place to start. Aunts, uncles, or older siblings are also good options.
Whomever you ask to be your cosigner should be reliable and have steady income. This will help ensure they meet the eligibility requirements for the loan.
How should I ask my “cosigner” to be my cosigner?
Once you identify the person you want to ask to be your cosigner, gather and organize all of the information about the loan in preparation for any questions your cosigner might have. Here are a few questions they might ask:
- Why are you applying for this loan?
- Who is the lender?
- Why do you need a cosigner?
When asking your cosigner to cosign your loan, be sure to communicate that you will be responsible and repay the loan on time. Remember, a cosigner is equally responsible for the loan, so any missed payments by you, the student borrower, will affect the cosigner’s credit history as well.
At College Ave, we’ll provide you an email you can send to your cosigner containing directions for applying; however, we recommend having a discussion with your potential cosigner before forwarding the email.
How do we know if my cosigner will qualify?
At College Ave, we offer a credit pre-qualification tool that will tell you if your credit qualifies for a loan and what interest rates to expect. This can be filled out prior to applying. After asking your cosigner, it is a good idea to have your cosigner use the pre-qualification tool to see if their credit qualifies. Click here to use the credit pre-qualification tool.
For more information on cosigners, check out What is a Private Student Loan Cosigner?