Refinancing student loans with a cosigner can help you lower your monthly payments and pay off your debt faster. But it’s not as simple as just calling up your best friend and asking them to cosign on your loan—this has to be a significant financial commitment for both parties involved.
Consider these steps before applying for student loan refinancing with a cosigner:
1. Get Your Cosigner Ready
First, you need to make sure that your cosigner will be able to meet these requirements.
They must:
- Be over 21 years old and not be claimed as a dependent by anyone else on their taxes (including parents).
- Have a good credit score (mid-600s or higher).
- Be able to afford the monthly payments on the loan payment plan you choose for yourself.
2. Choose The Best Student Loan Lender For You
There are plenty of lenders to choose from. If it’s your first time getting a student loan, you should consider looking at the lender with the lowest interest rate. The lower the interest rate is, the less money you’ll pay over time on your student loans.
When choosing a lender, don’t just look at those with lower rates—make sure they also have good borrower benefits and don’t charge too much in fees and charges. On the other hand, if you have excellent credit, it might make sense for you to go with a private lender rather than one offered by colleges or schools because private lenders often offer better terms (i.e., lower interest rates). On the other hand, Lantern by SoFi experts says, “a cosigner can boost your chances of qualifying for the lowest rates.”
3. Apply For Student Loan Refinancing With A Cosigner
The process of refinancing student loans with a cosigner is the same as refinancing on your own, but you’ll need to provide your cosigner’s information.
To find the right lender, you can use any refinance calculator to compare lenders and their interest rates. Then you can apply for refinancing with a cosigner by following these easy steps:
- Choose the best lender for you from the list of top lenders. You’re sure to find one that fits your needs!
- Complete the online application form by entering all relevant details about yourself and your loan history. The form should be pretty straightforward—you’ll need things like social security numbers for both yourself and any cosigners (like parents), names of current creditors, current monthly payments on all debts (including credit cards), income level etc. It will ask if any derogatory information is associated with any accounts that have been opened in recent years; make sure they are accurate before submitting them!
4. Stay On-time With Repayments and Reduce Your Balance
While you are saving money by paying less each month, this can actually cost you more in the long run. If a student loan account is delinquent and has collections fees added to it, these extra expenses will be passed on to cosigners as well.
In addition, late payments or missed payments can result in higher interest rates and even prevent future refinancing opportunities. It’s best for both parties if both parties stay on top of repayment arrangements so that everyone ends up with fewer headaches down the road!
There are many different ways to refinance your student loans with a cosigner. The most important thing is to make sure you choose the right lender for your situation and stay on time with repayments.