Getting a Cosigner Can Be Your Ticket to Qualifying for Student Loans – But Be Cautious
As you look into a private student loan for college, like NC Assist (one that's not from the federal government), you're probably going to need a cosigner. It has become much tougher for students to get loans recently because the best lenders with the strongest reputations and most resources for borrowers have the highest credit requirements.
Getting a co-signer could be your ticket to a college education once your other financial aid is exhausted. Obtaining a co-signer means that you have someone who's financially stable backing up the investment of your education with the very serious promise of sharing legal responsibility for repaying your loan and making sure the payments are made on time.
There is also the advantage of possibly getting a lower interest rate on your loan if both you and your cosigner's credit histories are good. Just a few ticks lower on your interest rate could save you thousands of dollars over the years of repaying the loan on your interest rate could save you thousands of dollars over the years of repaying the loan
Your co-signer could be a parent, a grandparent, an older sibling, some other relative, or a trusted friend, as long as that person has a good credit history. So - someone important in your life. Or, really, anyone you can recruit who meets the credit requirements.
If you're going to ask someone to share such a big financial responsibility with you, that person has got to be someone who has much faith in your talents, energy, and good intentions. But at the same time, both you and your potential cosigner should go into this arrangement with your eyes wide open.
Your cosigner is fully liable for your loan until his or her death or permanent disability, and his or her credit score and credit history will fully reflect whatever happens with the loan, for better or worse. So, if you don't make payments, your cosigner will be affected too. This will really test the personal bonds you have with your cosigner!
Getting a cosigner for your college loan might be the only way for you to handle the finances, but remember that you're carrying a serious obligation for that person's financial future as well.