Refinancing your student loans is a smart way to pay off your debt and save money on interest. However, you might find that you cannot refinance your loan if you do not have a cosigner. In this article, they’ll discuss what a cosigner is, how they work with student loans, and whether or not you will be able to get one if you need one for refinancing purposes.
Cosigner Overview
A cosigner is someone who agrees to be responsible for repaying all or part of a loan if you fail to do so.
When you’re borrowing money for school, renting an apartment or buying a car, banks and lenders will often require that you have someone willing to act as a cosigner on the loan application. It is quite easy to refinance a student loan with a cosigner.
In most cases, this person must meet certain criteria and provide financial information similar to your own. They may also need their own income-earning job and good credit history to qualify as co-borrowers (or borrowers) of your student loan agreement with you.
Cosigner on a Refinance Loan
A cosigner on a refinance loan is still required. If you want to see how your income and credit score stack up, the lender can see that information. While your cosigner won’t be paying for the loan, they will be responsible for it if you default on it. This means that they would have to pay off the debt themselves if something goes wrong with payments or anything else (like another late payment).
Lantern by SoFi experts says, “Refinancing your student loans can lead to better rates and terms on your education debt.”
If this happens, their credit score will take a hit since they were responsible for paying off the loan even though they didn’t. So if getting a lower interest rate is important enough to make sure that someone else’s credit rating isn’t affected by it, then consider going through this route instead of just getting a conventional student loan without using anyone’s help!
How To Get a Cosigner
You can find a cosigner in several different ways, including:
- Asking a family member or friend.
- Looking for them on your own.
- Applying for a cosigner loan. These typically require that you have very good credit and no outstanding balances on other loans, making it very challenging to get approved unless you already have great credit and don’t need the money immediately.
The Criteria for a Cosigner
If you want to refinance your student loans, you can do so with or without a cosigner. However, suppose a cosigner is required for the loan. In that case, you and your potential cosigner must meet certain financial criteria before the lender approves your application.
- Both parties must meet the same credit requirements as the borrower (see point #2 below).
- All applicants must be at least 21 years old and have a valid Social Security number.
- Your proposed cosigner must also have good credit scores to qualify for this type of student loan refinancing plan.
Whether you can refinance your student loan with a cosigner depends on your credit score, income and other factors. While it might be challenging to find someone willing to co-sign on your student loan, it’s not impossible!
