Student loan debt is a huge problem in the U.S., with more than 44 million people owing an average of $37,172 per borrower. So it’s not surprising that many people want to find ways to pay off their student loans faster. While some borrowers opt for income-driven repayment plans or refinancing their loans to a lower interest rate, applying with a cosigner can be an excellent way to do both!
With a cosigner, you will qualify for a lower interest rate
A cosigner is a person who promises to pay back the loan if you don’t. This can be a family member or friend, but usually, it’s someone with good credit and an income that makes it possible for them to pay off the debt.
A cosigner will generally help you qualify for lower interest rates—which means reduced monthly payments and more money in your pocket at the end of each month. A cosigner is also needed in cases when you are taking a student loan refinancing for bad credit. Lantern by SoFi experts says, “Your cosigner’s strong credit can aid for your bad credit and help you get easily approved.”
You’ll save more money
When you apply for a student loan, your cosigner will be responsible for the loan payments. This takes some of the financial burdens off of you and allows you to pay less interest on your loan.
The reason is simple: If a cosigner has a better credit score and income than you do, then they will be able to get approved for a lower interest rate than what was given to you by default. That means that even if it costs more money for your cosigner (whoever they are), they will save more money over time because their payments are significantly less expensive.
You’re more likely to get approved with a cosigner
If you’re like most people, then your student loan debt is probably weighing heavily on you. Student loans can be extremely difficult to pay off, and sometimes it’s hard to see a way out of them. So what if there was an easier way? What if there was a way that didn’t require any sacrifices or adjustments on your part?
That’s where cosigners come in! A cosigner is someone who signs the loan agreement with you as an additional party. The idea behind having a cosigner is that they will help guarantee the payments of your debt, thereby making it easier for lenders and banks to approve your application.
You’ll get better repayment terms with a cosigner
A cosigner will be more likely to make payments on time, keep the loan current and pay off the balance in full. This means that you’ll have a better chance of having your student loan debt forgiven after 20–25 years of consistent payments. You can also refinance with a cosigner if you have bad credit or no credit history at all!
Cosigners are usually parents or relatives who are willing to help their kids out with financing their education. If you’re struggling financially and don’t have any assets or collateral for a bank, then getting a cosigner can make it easier for you to get approved for refinancing student loans by giving them additional security against defaulting on payments if something happens to you (like death).
If you’re looking to refinance a student loan, apply with a cosigner. Your cosigner can help you qualify for better interest rates and more favorable terms than the standard student loan refinancing options.
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