Refinancing your student loan with a co-signer could save you money by lowering your interest rate, and help you pay off your debt faster. We’ve evaluated the best refinancing options based on rates, terms, process, fees, and overall quality.
First Tech Federal Credit Union provides competitive rates, but you'll require a membership to receive those benefits. To become a member, you'll have to meet some strict requirements.
UNDERGRADUATE LOANS: Fixed rates from 3.47% to 12.55% annual percentage rate ("APR") (with autopay), variable rates from 2.26% to 13.54 % APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60% to 12.55% APR (with autopay), variable rates from 2.96% to 13.54% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 13.05% APR (with autopay), variable rates from 2.06% to 14.04% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 06/08/2022.
Can you refinance a student loan with a co-signer?
Yes, you can refinance student loans with a co-signer. The only requirements are that the loan is in your name and that you meet the lender’s other eligibility criteria.
The lender will review your credit history and income to determine if you qualify for a new loan. If you have existing debt, such as a mortgage or car loan, the lender will also look at how much of your income goes toward paying down those debts.
Some lenders allow you to refinance student loans with a co-signer even if there is no requirement for a co-signer on the loan. This means that you could find an option that doesn’t require any sort of co-signer, and you can just apply providing your income, credit history, and savings (in case of an emergency).
If you need help qualifying for a student loan refinance, adding a co-signer can also be a suitable option. For instance, if your income isn’t sufficient enough to qualify for student loan refinancing on its own and you have a good credit score, then having a co-signer with a higher income might make it possible for you to refinance your student loan.
Is refinancing a student loan with a co-signer worth it?
The bottom line is that refinancing a student loan with a co-signer is worth it. The benefits outweigh the drawbacks, and you should consider this option if you’re looking to lower your monthly payments or pay off your debt sooner.
Here are some of the reasons why you should consider having a co-signer:
More likely to get approved for a loan: When you apply for a loan on your own, you must prove that you are financially responsible and can repay the money. However, if you have a co-signer, it can help ease those concerns. A co-signer can provide reassurance to the lender that you are trustworthy and will be able to pay back the loan without any trouble. That means there’s less risk for them when lending money to someone with a co-signer, making them more likely to approve your application.
A reasonable interest rate: Banks are more willing to offer good rates when they know someone else is backing up their investment in case something goes wrong with the borrower. If you have an excellent credit score and good income but still need help paying off your student loan, refinancing it with a co-signer will earn you a better interest rate.
Good credit or income proof is not required: The lender will usually review your credit report and income information, but they are not as strict as a bank regarding this criteria. With a co-signer, you can finance loans even if you have a poor credit history or low income.
No additional credit check required: If you’re looking to refinance a student loan with a co-signer, you don’t need to worry about having another credit check done. This can be helpful if you’ve recently applied for other types of loans or are planning to apply for one soon.
Fixed interest rate for the life of the loan: One of the biggest benefits of refinancing a student loan with a co-signer is that your interest rate will remain fixed for the life of your loan. That means that even if interest rates increase over time, your payments won’t change, and your total borrowing cost over time will not change.
How to refinance a student loan with a co-signer
Here is how you can refinance your student loan with a co-signer and how to find the right lender for you:
Compare lenders that allow a co-signer: The first thing to do is to compare lenders that allow a co-signer. There are some lenders out there that do not allow a co-signer, but a majority do. You can find these lenders online or via major banks and credit unions within your region.
Find a co-signer: Once you have found a lender who that allows a co-signer, it’s time to find someone willing to help with your student loan. This can be someone you know, such as a parent, family member, or a friend who agrees to help with your payments and financial obligations.
Prepare your documentation: Before applying for a loan with a co-signer, ensure you have all the documents necessary to complete the application. You’ll need identification for both yourself and your co-signer (i.e. your social security number), proof of income, and employment history.
Submit an application: Once you’ve gathered all the necessary documentation, you can begin the process of submitting an application. The forms you will submit with your application include proof of identity (for both the applicant and co-signer), tax returns, and proof of income from each party involved in the loan application process.
What makes a good co-signer?
A co-signer can help you get a loan or credit card even if you have bad credit. But what makes a good co-signer?
Sufficient income: A good co-signer is someone who can afford the debt if the borrower fails to make payments. If you are a parent and want to co-sign on loan for your child, it’s essential to consider whether you can afford it and if it’s worth the risk.
Excellent credit score: The ideal co-signer is someone with a good credit score who has held a stable job for years, has an income that covers their expenses, and also some savings for emergencies. These are not requirements for co-signing but they are a plus when applying for a loan.
Can a co-signer be removed from a student loan?
If you decide you would like to remove a co-signer, it is possible. Removing a co-signer is also referred to as “debt relief,” and it can be done with a private student loan or a federal student loan. If you’re considering debt relief, it’s essential to understand what it means for your credit and how it will be affected.
If a co-signer would like to remove their student loan debt, here are some options:
If you have a private student loan, you can consolidate your loans into one new loan with a lower interest rate and monthly payment that better fits your budget.
Another option is refinancing your private student loan into a lower interest rate loan with another lender. Refinancing allows you to get rid of high-interest rates on money that may have been borrowed years ago.
What is the difference between a co-signer and a co-borrower?
A co-borrower shares ownership of the funds or asset, while a co-signer does not. Co-borrowers are legally responsible for repaying a loan, and their credit score is often considered when lenders make their final decision. On the other hand, a co-signer doesn’t have any legal responsibility to repay the loan. If a co-borrower defaults on their obligation, they may be sued by the lender and forced to pay up.
Additionally, a co-signer guarantees the repayment of a debt or loan for another person. If you co-sign for someone else’s debt or loan, it means you’ll be held responsible for paying off the debt instead of the applicant. Unless they declare bankruptcy, which happens in some extreme situations.
How to choose the best student loan when refinancing with a co-signer
The following are some key tips to help you choose the best student loan when refinancing with a co-signer:
Consider the interest rate: When choosing a student loan to refinance, one of the most important factors is the interest rate. The lower the rate, the better your chances of saving money on the loan in the long run.
Look at fees and penalties: Co-signers are responsible for paying back the student loan if the borrower misses payments. However, some lenders charge fees or penalties if the applicant(s) leaves school or becomes unemployed — so look into these details before signing up for a co-signed loan with a family member or friend.
Compare rates across lenders: There are two types of lenders regarding student loans: private and federal government lenders like Sallie Mae or Federal Direct Loans (FDLs). Private lenders typically offer lower interest rates than federal ones because they don’t provide financial aid assistance or other benefits that typically come with federal loans. However, if you qualify for FDLs, they’re usually more affordable than private loans because they have fixed interest rates and are subject to income-driven repayment plans that can reduce monthly payments based on how much money you make each month.
Consider your creditworthiness: If you have poor or no credit history, then having a co-signer might be necessary to get approved for a student loan refinance plan. But if you have good credit and can qualify on your own, it may not be worth the risk, especially if your co-signer has a bad credit history.
