Cosigner / Co-Endorser / Coborrower
"Cosigner / Co-Endorser / Coborrower" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
A cosigner on a loan assumes responsibility for the loan if the borrower should fail to repay it. A person, other than the borrower, who signs the promissory note as a back up for repayment on the loan. A co-signer is pursued for collection on the loan if the borrower fails to fulfill his repayment obligations. You don’t need a co-signer to get a federal student loan but you may need a co-signer to get the best possible deal of Private Loans.
If you still need money for college after reaching the borrowing limits for federal loans, look into other options. Private loans often carry higher interest rates and fees than federal loans, and may have less attractive repayment terms. Typically, the interest rates on private loans are variable and can change from month to month. Private loans are usually based on your credit rating and income-to-debt ratio - not financial need - and may require a co-signer. The information in your credit report will determine the interest rates you qualify for. A number of lenders offer private loans. Ask questions and compare lenders to make the choice that’s best for you.
Both Stafford loan program and the Perkins loan program do differ a little bit in the terms of the student loan, but both of these are student loans without a cosigner type programs. This means that regardless of the student’s credit or the parent’s credit history the student will qualify for the loans. This is the best option available to students today.
A PLUS Loan applicant must not have an adverse credit history. (A credit check will be conducted.) A PLUS Loan applicant who has an adverse credit history still may be able to receive a loan by documenting existing extenuating circumstances or by obtaining an endorser who does not have an adverse credit history. An endorser or co-signer is someone who agrees to repay the loan if the borrower fails to do so.
Question To Ask:
- What’s the interest rate: Fixed or variable? If variable, how often will it be adjustedWhen does interest capitalize and how often
- Is there a maximum amount you can borrow
- Is a co-signer required? Will having a co-signer lower the interest rate
- Is there an application fee? Are there any disbursement fees? Any repayment fees
- Is the loan check payable to you or your college? How long does it take to receive funds
- Are there reduced interest rates for on-time payments
- What will your minimum payment be? When does repayment begin? How long do you have to repay? Is there a prepayment penalty
- Will you get one bill for all your private loans? Can your private loan bills be combined with your federal loan bills
- Will your payments be deferred while you’re in school? If so, will interest continue to accrue
- What happens if you can’t make your payments due to a job loss or other economic hardship? Do you have any deferment or forbearance options
Private student loan cosigners
Eligible loan programs generally issue loans based on the credit history of the applicant and any applicable cosigner/co-endorser/co-borrower. This is in contrast to federal loan programs that deal primarily with need-based criteria, as defined by the EFC and the FAFSA. For many students, this is a great advantage to private loan programs, as their families may have too much income or too many assets to qualify for federal aid but insufficient assets and income to pay for school without assistance.
Many international students in the United States can obtain private loans (they are usually ineligible for federal loans) with a cosigner who is a United States citizen or permanent resident. However, some graduate programs (notably top MBA programs) have a tie-up with private loan providers and in those cases no cosigner is needed even for international students.
It is more than possible to obtain student loans without a cosigner – in fact, it is more than likely that you can. Federal student aid is available to almost anybody to make college more affordable, and no cosigner is necessary. Gift aid and private student loans also may help you to fund your academic career but may be more difficult to obtain, or more difficult to obtain without a cosigner, respectively. Apply for a student loan that doesn't require a credit score check with help from a financial aid officer in this free video on student loans and financial aid. Visit: