What is a co-signer for a student loan?

Things to consider as the primary borrower:

In order to qualify for a private student loan, you may be required to have a co-signer. You may also choose to have a co-signer to borrow at a lower interest rate due to the co-signer’s good credit record. Before you ask someone to co-sign a loan, consider the obligations and risks:

• As with undertaking any legal obligation, be sure to read the loan documents carefully.
• The student borrower is required to make all payments on time, as outlined in the terms of the loan. Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history.

Things to consider as a co-signer:

• As with undertaking any legal obligation, be sure to read the loan documents carefully.
• Co-signers are equally responsible for and legally obligated to repay the loan. As a co-signer, consider whether you are willing and able to repay the loan if the student borrower does not repay the loan on time.
• Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history. Before co-signing a loan, consider whether you are willing to risk harm to your credit record if the student borrower does not repay the loan.
• If the loan goes into default, private lenders often hire collection agencies to get a co-signer to repay. As the co-signer, you could also be sued by a debt collector or lender.

Learn more about how to prepare to become a co-signer.