Use a Student Loan Cosigner to Help You Establish Credit and Save Money
If you’re about to apply for private student loans, and you don’t have a credit history or a credit score, you’re not alone. And if you have a credit history, but not a great credit score, a cosigner may help you qualify for more competitive private student loans and interest rates than you thought possible.
What is a Cosigner?
A cosigner is a person who signs for a student loan with you. If you miss payments or default on your loan, the cosigner agrees to takes responsibility for payments and the remaining balance. Both you and your cosigner have equal obligations for your loan. On-time payments made to your loan will positively impact your credit score and that of your cosigner. However, missed or late loan payments, unpaid balances, and default affect both you and your cosigner’s credit negatively.
Your cosigner should be financially stable, with a good job and a solid employment history and/or own a home or other assets. You should be prepared to answer any questions your potential cosigner has that will show you’re capable of and serious about taking on the financial responsibilities of the loan. It’s important that both of you understand all terms of the loan and be clear on responsibilities before signing.
Using a Cosigner
Private student loans may be available to students without credit histories, but there can be advantages to adding an approved cosigner to your student loan. The better your cosigner’s credit score, the lower the interest rate you may qualify for, helping you to qualify for lower payments now and reduce the interest you pay over the course of your student loan.
If you will be able to make student loan payments and just need someone to give you a chance to prove you’re financially responsible, applying for a private student loan with a cosigner can be a great way to build your credit and save money. Once you’ve proven yourself to be reliable, many lenders allow you to remove a cosigner from your loan after you meet certain requirements and have a certain number of on-time monthly payments; with U-fi, that number is 24 payments.
A cosigner can help you obtain a private student loan you may need to complete your education, and qualify for competitive interest rates to help save you money. With on-time loan payments, a good cosigner helps you establish your credit and boost your credit score. Learn more about requirements for cosigners – and get started with a smart U-fi loan today.