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What is a co-signer for a student loan?

A co-signer is a person who agrees to repay a loan along with the primary borrower.

Qualifying for a private student loan sometimes requires borrowers to get a co-signer. Having a co-signer may allow a student to borrow at a lower interest rate if the co-signer has a good credit record. Before you co-sign a loan or ask someone to co-sign a loan, you should consider the obligations and risks associated with co-signing a loan.

  • Co-signers are equally responsible and legally obligated to repay the loan. A co-signer should consider whether they 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. A co-signer should decide before co-signing a loan whether they are willing to risk harm to their credit record if the student borrower does not repay the loan.
  • Private lenders often hire collection agencies to get a co-signer to repay. A lender or a debt collector may also sue a co-signer.
  • If you do not qualify for individual credit, a creditor may require a co-signer, but that person does not have to be your spouse.

Some lenders may offer to release the co-signer from the loan once the primary borrower or student borrower makes a certain number of on-time payments and meets other credit requirements, including a credit check. Many lenders and student loan servicers do not proactively tell you when you are eligible to have your co-signer released.

TIP: If you are interested in releasing your co-signer, you should contact your servicer to find out if you are eligible and what steps they require. To help you get started, we put together sample letters you can edit and send to your student loan servicer.

Here are more tips on protecting your credit as a co-signer.