Find a Private Loan Co-signer

Most college students will need to find a private loan co-signer in order to get approved for a loan, especially undergraduate students with little income or credit history. Even if you are working full-time, adding a private loan co-signer could improve your interest rate and increase the amount that you are able to borrow.

Who can be a Private Loan Co-signer?

Most lenders will allow any adult who is willing to share the responsibility of the loan with you to be your private loan co-signer. Most students first ask a parent, but you can also look to a friend or relative, as long as your lender will allow it.

Perhaps the most difficult part of finding a private loan co-signer is making sure you select someone with a good credit history. Ask your private loan co-signer to make sure that he/she has the following basic qualifications before you apply for a private student loan:

  • A good credit history of borrowing, charging and repayment with few or no late payments on their credit report
  • No excessive delinquencies, judgments, accounts that have been charged off or bankruptcies that were pending, filed or discharged in the past two years
  • No prior student loan defaults
  • Be a U.S. citizen and 18 years or the age of majority in their state
  • Verifiable income

Speaking with a Potential Private Loan Co-signer

Are you having trouble approaching a potential relative or friend about becoming your private loan co-signer? If your parents are facing financial hardship, and cannot co-sign a private loan for you, you may have to ask a family friend or a relative. Here are some of the things you might say to help convince someone that you need their help:

  1. “I have exhausted all other financial aid options”

    Explain to your potential private loan co-signer that you have already maximized all of your financial aid and you need their help in order to pay for school. Remind him/her that if you cannot pay your school bills, you may not be able to complete your education.

  2. “I plan to be responsible when paying back the loan”

    Make sure your potential private loan co-signer knows that you plan to make your payments on-time, so that their credit will be protected (as well as your own)!

  3. “You may only need to be on the loan temporarily”

    If you start earning money and making your payments on-time, you may qualify to have your co-signer released from the loan.

  4. “I’m only borrowing what I need”

    Your potential private loan co-signer might want to know that you have already created a college budget, and you are only borrowing what you really need.