How to Ask Someone to Cosign a Student Loan
Follow these helpful tips before asking a friend or relative to be a cosigner on your private student loan.
- A cosigner does not need to be an immediate family member.
- Explore all of your financial aid options before thinking about a cosigner.
- Schedule a time to talk before asking about cosigning a student loan.
- Have a backup plan in case one person declines your request.
College is getting more expensive every year, causing many students to explore many ways to finance their education. Lenders often require a cosigner to qualify for a private student loan, since most college students don't have a credit built up or income history.
If you're considering a cosigner for a student loan, follow these tips before you ask for their help.
Who Should You Ask to Cosign a Student Loan?
You and your cosigner don't need to be family, which gives you a broader variety of people to consider for this responsibility. Lenders care more about the cosigner's financial stability rather than the personal relationship between the two.
Here are some options to consider as a potential cosigner:
- Parents or guardians
- Other family members
You may not know everyone's exact financial situation, but consider the factors that a lender will look at, including their credit score, outstanding debt, and monthly income. Depending on how openly you talk to your close friends and relatives about money, you may or may not be able to accurately estimate their ability to cosign a loan — let alone their willingness.
How to Ask Someone to Cosign a Student Loan
Follow this step-by-step guide on how to get someone to cosign for you on a student loan.
Explore Other Financial Aid Options First
Before you start conversations about someone cosigning a loan, make sure you've exhausted all of your other options for financial aid.
The Free Application for Federal Student Aid (FAFSA) offers need-based aid in the form of grants, federal student loans, scholarships, and work-study job opportunities. Find out how much aid you can get from your FAFSA, then check other grant and scholarship opportunities that could lower your overall cost of attendance.
Choose Your Potential Cosigner
If you don't qualify for enough federal aid to cover college costs, it's time to consider potential cosigners for private loans.
First and foremost, a cosigner needs to be financially secure enough to back your student loan application. So not only do you need to pick someone who is likely willing to cosign the loan, you also need to pick a person who meets basic loan eligibility requirements. These include things like having a monthly income, a good debt-to-income ratio, and a solid credit score.
Ask Your Cosigner to Talk
Next, it's time to schedule a conversation with your potential cosigner. You don't want to spring a personal financial conversation on someone without them expecting it.
Ask when is a good time to talk about some of your upcoming decisions regarding college. That way, they have the time and headspace to give you the attention you need and make a decision they're comfortable with.
Explain What You Need and Why
Once both of you are ready to have the conversation, be clear about what you're asking. Explain what you need the student loan for, giving details on what gap you need to fill that your student aid package didn't provide. Also, outline the requirements you need of a cosigner, including a minimum credit score and consistent monthly income.
Show Them You'll Be Responsible for the Payments
Another part of the conversation is talking about your responsibility for the student loans. Figure out when payments start, whether they are deferred until graduation or if you need to start making interest-only payments while still in school.
Either way, you need to have a plan on how to make those payments on your own and be able to communicate them to your cosigner. It's also smart to have a backup plan in case something doesn't work out, such as your willingness to get a part-time job if it takes longer than expected to get hired in your future field.
Inform Them of the Potential Effects on Their Credit
The final part of your conversation with a potential cosigner is to offer details on how their credit will be impacted. They are just as responsible for the loan as you are. The balance will appear on their credit report, which could cause their score to drop.
In addition, anytime you're late on a payment that is reported to the credit bureaus, it's equally reported on their own credit history. If you default on the loan, it hurts their credit score as well. Finally, if you pass away before the loan is paid for, they might need to assume full responsibility for paying off the balance.
Be Prepared to Ask More than One Person
Cosigning on a student loan requires a lot of trust and financial responsibility. That's why you shouldn't feel hurt or upset if your first choice doesn't say yes. Instead of getting emotional, be prepared for this scenario in advance by having a short list of potential cosigners.
That way, you have options for moving forward. After all, it's impossible to know someone's full financial situation or their attitude towards money. Many people have a closed-door policy when it comes to mixing money and personal relationships, and that's okay. Move forward by having multiple backup plans in place.
Frequently Asked Questions About Asking Someone to Cosign a Student Loan
How do you convince someone to cosign a loan?
It's important to be transparent with anyone you ask to cosign a student loan. Give details about your responsibilities and how you plan to handle future loan payments. The potential cosigner needs to be assured that you'll take care of the loan so their credit won't take a hit.
Who can I ask to be my cosigner?
There are no specific rules stating who may or may not apply as a cosigner on your student loan. However, their financial and credit background must meet the lender's requirements for your loan to get approved.
Can I hire someone to be a cosigner?
It's possible to find online listings or websites that offer student loan cosigning services for a fee. But these can either be scams to get a cash payment from you, or they may demand a portion of the loan funds you receive. This is definitely a high-risk situation that is not worth the gamble.
What percentage of student loans are cosigned?
Most federal student loans do not require a cosigner. Most private student loans, however, do have this requirement. In 2015, the Consumer Financial Protection Bureau estimated that 90% of private student loans had a cosigner.
DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.