Reyna Gobel, M.B.A. and M.J., is a financial and physical fitness journalist, author, and course instructor who’s published on reuters.com, weightwatchers.com, and theatlantic.com. Her CliffsNotes books on repaying student loans and paying for colleg.
Reyna Gobel ContributorReyna Gobel, M.B.A. and M.J., is a financial and physical fitness journalist, author, and course instructor who’s published on reuters.com, weightwatchers.com, and theatlantic.com. Her CliffsNotes books on repaying student loans and paying for colleg.
Written By Reyna Gobel ContributorReyna Gobel, M.B.A. and M.J., is a financial and physical fitness journalist, author, and course instructor who’s published on reuters.com, weightwatchers.com, and theatlantic.com. Her CliffsNotes books on repaying student loans and paying for colleg.
Reyna Gobel ContributorReyna Gobel, M.B.A. and M.J., is a financial and physical fitness journalist, author, and course instructor who’s published on reuters.com, weightwatchers.com, and theatlantic.com. Her CliffsNotes books on repaying student loans and paying for colleg.
Contributor Mike Cetera Editor in Chief, Forbes Marketplace U.S.Mike Cetera is the editor in chief for Forbes Marketplace U.S. Mike has written and edited articles about mortgages, savings accounts, CD rates and credit cards for more than a decade. Prior to joining Marketplace, his work appeared on Bankrate, The.
Mike Cetera Editor in Chief, Forbes Marketplace U.S.Mike Cetera is the editor in chief for Forbes Marketplace U.S. Mike has written and edited articles about mortgages, savings accounts, CD rates and credit cards for more than a decade. Prior to joining Marketplace, his work appeared on Bankrate, The.
Written By Mike Cetera Editor in Chief, Forbes Marketplace U.S.Mike Cetera is the editor in chief for Forbes Marketplace U.S. Mike has written and edited articles about mortgages, savings accounts, CD rates and credit cards for more than a decade. Prior to joining Marketplace, his work appeared on Bankrate, The.
Mike Cetera Editor in Chief, Forbes Marketplace U.S.Mike Cetera is the editor in chief for Forbes Marketplace U.S. Mike has written and edited articles about mortgages, savings accounts, CD rates and credit cards for more than a decade. Prior to joining Marketplace, his work appeared on Bankrate, The.
Editor in Chief, Forbes Marketplace U.S.Updated: Mar 7, 2024, 5:30pm
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If you are applying for a private student loan and don’t qualify on your own based on credit or income, you may need a co-signer. A co-signer is a person who agrees to be responsible for the loan if you can’t repay it.
This is a big commitment because the person agreeing to be your co-signer—typically a family member or close friend—is taking a risk. Afterall, it’s not just your credit that will be affected if you miss student loan payments. Their credit will take a hit, too.
Still, you may be able to settle any fears they have in making this commitment by offering them a way to eventually get out of the responsibility. Some private student lenders offer to release co-signers after you’ve met certain requirements, like making a certain number of on-time payments.
A co-signer release is when the lender agrees to take the co-signer’s name off the loan because you now have sufficient credit and income to qualify for the loan on your own. This generally occurs because you’ve been in the workforce for at least a year after graduation and have focused on building good credit.
Co-signer release is only an option on private student loans. Federal unsubsidized and subsidized loans don’t require co-signers and have no established credit or income expectation to qualify. Federal PLUS loans may require an endorser, which is essentially the federal government’s version of a co-signer. This type of loan doesn’t allow endorser releases either for parents or graduate students.
Each private student lender determines the requirements necessary for releasing a co-signer. But most lenders likely will examine your history of on-time payments, credit score and income. Check with your lender for its specific rules for private student loan co-signer release and ask for it in writing if possible.
Co-signer releases are granted based on your ability to repay the loan on your own. Follow these steps to ensure you’ve put yourself in the best position to win release:
Not all lenders provide co-signer releases, but many do. Before borrowing from a private lender, you should call them to make sure the program hasn’t changed. Lenders can make changes to their co-signer release options at any time.
Ascentoffers co-signer release after 12 consecutive, on-time payments of both the full interest and principal due each month. You must also be a U.S. citizen, meet income and credit requirements that show the ability to repay student loans without help from a co-signer and sign up to make automatic payments.
College Ave Student Loans will not approve a co-signer release unless more than half of the repayment period has passed and you’ve made the last 24 consecutive payments on time without any need for temporary payment breaks. If your repayment plan was for 10 years, you’d have to wait for more than five years to ask for a co-signer release.
CommonBond requires three years of consecutive on-time payments before it will approve a co-signer release. Your loan has to meet credit and income standards, but, unlike some other lenders, your federal student loan repayment plan likely won’t affect your approval for a CommonBond co-signer release.
Navy Federal offers co-signer release on private student loans after 24 months of on-time, consecutive full principal and interest payments without any temporary breaks from payments. The exception from the temporary breaks from payments are in-school deferments and grace periods. Payments have to be made by the 15th of each month. You must also prove income and pass a credit check.
Sallie Mae offers a co-signer release option after 12 on-time payments that cover principal and interest. You must also be old enough to sign a contract (18 in most states), provide proof of completing the education program you attended with the loan money, be a U.S. citizen, provide W2s or other income proof and have had no loan in hardship or other modified payment programs.
If you may need a longer repayment term than the 10-year standard repayment option, wait to change your payment plan after you receive the co-signer release. Ask the co-signer to help you make payments if needed to get through the first year of payments on the standard 10-year repayment plan.
If you don’t qualify for co-signer release or your lender doesn’t offer it, there are a few alternatives to consider that may help release your co-signer from responsibility sooner:
Getting a co-signer release frees you from your family member or other co-signer being responsible for your loan. To have the best chance of getting a co-signer release, know the rules your lender sets out for your release and follow them, make monthly payments in full and on time and build good credit.
