Using a Co-Signer to Get a Personal Student Loan

If you are looking to use a cosigner to get a personal student loan it is important to ask someone with a good credit rating such as your parents, siblings or a close friend. Since you are a student, most likely you have not established a long standing credit history therefore inhibiting your ability to secure a student loan on your own. It is crucial to sit down with your cosigner to discuss other forms of financial aid, bank loan options and the application process.

Other Financial Aid Options

If you are in a situation where a cosigner is not available, you can look into options such as scholarships or grants. In several cases, you can research online student grants and websites will surface instructing you on how to apply for them. Speak with your guidance counselor or academic advisor as they are privy to the most up to date financial resources for their students. Unfortunately, most lenders will require a cosigner, but if you are able to exhaust all other financial options, you will decrease the amount needed to borrow.

Bank Options

First you will need to find out if your bank, or the bank of your cosigner will offer you a student loan. In some cases students are eligible for a Federal Student Aid Loan which would not require a cosigner. In other situations, certain banking institutions only offer limited loan options to individuals that require a cosigner. If this is the case, it is recommended you and your cosigner sit down to discuss what the different loan options are at each banking institution to evaluate which loan will best suit your needs. Try to avoid using online lenders since their existence is based on taking advantage of those who have difficulty getting a loan from a bank. The purpose of having a cosigner is to assure the bank that they will be paid, which in turn should allow you to avoid online lending.

Application Process

Once you’ve decided upon your cosigner and the institution you will be borrowing from, it is time to take your cosigner with you to fill out the loan applications. Before going to the institution, be prepared with all proper documentation such as most recent pay stubs and valid identification such as a driver’s license. Even though your loan approval is largely based on your cosigner's credit rating, they will need to see proof that you will be able to repay the loan. Be sure to discuss your cosigner‘s good credit history in efforts to bargain for a lower interest rate and optimal repayment options. You do not want a loan that requires your cosigner to put up collateral. When people have an excellent credit history they typically qualify for unsecured loans, which do not require any form of collateral.

Remember to only borrow what you will need regardless of how much the bank is willing to lend. It is important to note that larger loans equal larger interest rates. Lastly, make sure the loan is to be deposited into your account and not that of your cosigners.

 


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