What you need to know about cosigners on student loans
Updated on December 24, 2019
If you don’t have an established credit history, it could be difficult to get student loans on your own. However, you will be able to get one if you have a cosigner. Your cosigner is someone with an established credit history who will be responsible for the loan payments if you default on the loan, which makes it possible to take out a student loan even if you don’t have a substantial credit history of your own.
Who can be a cosigner for student loans?
In order to be a cosigner, an individual has to have a high credit score and a substantial credit history. In most cases, cosigners are parents or other family members. However, a cosigner does not need to be a member of the borrower’s family.
What happens if you don’t pay a student loan and have a cosigner?
If you default on a student loan and have a cosigner, the lender will attempt to collect from the original borrower and then the cosigner. However, it does not change the fact that your credit score will suffer if you default on the loan. If both you and your cosigner default on the loan, it will have an impact on both of your credit scores, and the outstanding debt will go to collections.
Can student loans be beneficial for your credit score even if you have a cosigner?
Getting a student loan and successfully making the payments can be very helpful when it comes to your credit score, and you’ll still benefit from this improvement in your credit score even if you have a cosigner. In fact, getting a student loan and making payments on time can be the first step towards building enough credit to take out a mortgage, auto loan, or business loan.
Is it a good idea to have a cosigner on student loans?
Having a cosigner can allow you to get a student loan when you would not be able to get one otherwise or increase the amount that you’re able to borrow, which can make it much easier to pay for college. In most cases, traditional-age college students should get a cosigner for their loan(s) if it’s possible.