How to release a co-signer from your student loans
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Although most federal student loans do not require a credit check, you will need good credit to qualify for a private loan. student loans – or a co-signer with good credit.
Having a co-signer with good credit by your side can make it easier to get private student loans at a better price. interest rate. In fact, student borrowers who hire a co-signer with good credit enjoy about 2.36% lower interest rates than borrowers who don’t have co-signers, according to a Credible data analysis.
Although adding a co-signer can be beneficial for borrowers, acting as a co-signer comes with many risks. Naturally, co-signers may want to be released from liability as soon as possible.
If you’re considering a private student loan with a co-signer, it’s a good idea to see which lenders might allow you to release the co-signer later. Credible, it’s easy to compare private student loan rates lenders who offer co-signer release.
8 private student loans with co-signer release option
Each lender has different requirements when it comes to releasing co-signers, but as you’ll see in the following overview of student loans with the release of the co-signer, borrowers typically must make a number of consecutive on-time payments on their loan before they can release their co-signer.
These eight credible partner lenders offer private student loans with co-signer release:
You can compare student loan rates from these lenders in minutes when you use Credible.
Requirements for co-signer release
Each lender has different requirements when it comes to releasing a student loan co-signer. If you are considering releasing your co-signer, you should make sure you fully understand your lender’s requirements before taking out the loan. Here are some common co-signer version requirements:
- Make payments on time. You may be able to release your co-signer after making a number of consecutive payments on time.
- Meet credit requirements. Having a high credit score can help you qualify to release a co-signer.
- College graduate. You may need to meet two requirements like making consecutive payments on time and getting a college degree.
How to request the release of the co-signer
When it comes time to release a co-signer, each lender has different requirements for their application process. You will usually need to provide proof in the application of your:
- Credit score
- Absence of bankruptcies or foreclosures
If you are ready to request the release of the co-signer, you can expect to take the following steps:
- Contact your lender and ask for the application form. Again, each lender has a different cosigner release request, but they can guide you through the process.
- Complete the application. Complete the application carefully and follow the steps requested.
- Provide proof of all release requirements. Part of the application process will include providing proof of the lender’s qualifications to release a co-signer, such as having a certain income or credit rating.
- Thank your co-signer. In the end, don’t forget to thank your co-signer for their support!
You should always exhaust all of your federal student loan options before turning to private student loans. You apply for federal loans in complete the FAFSA. If you decide that a private student loan meets your financing needs, here are the steps you would typically take to apply for a loan from a private lender:
- Comparison store. Before choosing a private student lender, do some comparison shopping to see which lenders will offer you the lowest interest rates and fees, and the most favorable terms. You may also consider in-school deferment options and potential repayment schedules.
- Prequalify with different lenders. Once you have a general idea of private lenders who might meet your financial needs, you can prequalify to get an idea of the loan terms you are likely to qualify for. This should include loan amounts and interest rates. Prequalification is not a guarantee that you will get a loan, but it will give you a clearer idea of the rates and terms for which you may qualify. Prequalification does not affect your credit (soft inquiry) like a formal application (hard inquiry) does, so you can prequalify for as many student loans as you want.
- Find a co-signer. If you need a co-signer to qualify for a private student loan or to qualify for better interest rates, talk to a trusted family member, such as a relative or a friend, to act as your co-signer. Make sure they are comfortably on board with the arrangement.
- Complete the application with a co-signer. Finally, you will complete the private student loan application with your co-signer to complete the process. If you are approved, you will receive the funding you need to pay for your education.
When shopping for student loans, check the interest rates each lender is likely to offer you. Remember, you can get a much clearer idea of these interest rates if you prequalify. You can use a student loan calculator to help you calculate how much different interest rates will cost you over the term of your loan.
HOW TO REFINANCE STUDENT LOANS WITH BAD CREDIT
Refinancing your student loans could free up your co-signer
Co-signer release is not available to everyone – some lenders don’t offer it and some borrowers won’t qualify.
If you are not approved for a co-signer release and agree to release your co-signer from their obligations, refinance student loan in your own name could be another way to release your co-signer.
Refinancing a student loan involves taking out a new student loan and asking the new lender to pay off your original student loan or multiple student loans. Ideally, your new student loan will come with a better interest rate so you can save more money over the life of the loan. If you have improved your credit score or income since first applying for the original student loan, you may be able to qualify for better rates through refinancing.
It’s worth noting that you can apply for a refinance with the help of a co-signer if you’re simply looking for a better interest rate, a new repayment term, or to consolidate multiple loans. Some co-signers — like your parents — who have seen you make regular payments on time may not mind co-signing the new refinanced loan if it helps you save money and pay off your student loans more easily.
Refinancing your student loan without the help of a co-signer is much easier if you have the credit score that most lenders are looking for. Having a FICO score of 670 or higher can make it easier to qualify for refinancing at favorable interest rates and loan terms. The higher your credit score, the higher your interest rate is likely to be and the less interest you’ll pay over the term of your student loan, provided you don’t extend your repayment term.
It’s a good idea to compare student loan rates from several lenders if you’re considering refinancing. Credible, it’s easy to see your prequalified rates from multiple lenders in minutes.
Here are the answers to some frequently asked questions about student loan co-signers.
Can you withdraw from a co-signed student loan?
No, if you are a co-signer, you cannot withdraw from a student loan. The original borrower must take the necessary steps to request the release of their co-signer. The original borrower usually needs to make a number of consecutive payments on time to be able to release their co-signer.
Do late payments affect the co-signer?
Yes, late payments can affect the co-signer. Not only do late payments not count towards the consecutive payments needed to qualify for a co-signer’s release, but they can also hurt the co-signer’s credit rating. That’s why it’s so important that co-signers understand their responsibility and that the borrower has a plan to make payments on time month after month.
How long is a cosigner responsible for the loan?
Co-signing a loan makes the co-signer also responsible for all of the debt. As long as the loan has to be repaid, the co-signer is responsible for it. Ideally, the original borrower will make all their payments on time and the co-signer will never need to make a payment.