Finding a cosigner for your private loan

finding a cosignerIt is very difficult for students to be approved for a private student loan on their own. As such, if you are a student borrower, without an established credit history and a current, steady income:

Overview

Due to the current credit crunch, it will be harder than ever to be approved for a private student loan this year. Lenders are making their credit criteria stricter than in years past. For almost all students, a credit-worthy cosigner will be a REQUIREMENT to be approved for a private student loan.

These tips provide you with advice on what to look for in a cosigner and how to make your case that cosigning a loan with you is a good risk to take.

Making your case to a cosigner

What are your financial aid options?Before approaching a potential cosigner with a request for help applying for a loan, prepare.

Once you have outlined this information, you are ready to have a talk with your potential cosigner. Set aside adequate time with your cosigner. Show the potential cosigner that you have carefully thought through the size of the obligation – and that you believe it is something you can handle. Be honest and open with the potential cosigner about how this obligation will be a long-term commitment on their part.

Go over your calculations and loan choices with your cosigner. SimpleTuition provides the ability to email loan information on many lenders – use those tools as ways to share information with your cosigner.

Be honest about the fact that in order for the loan application to be accepted, the cosigner will need to have a strong credit score (roughly 675 or higher) and will need to document their income. Give them this information before they agree to help you – that way if credit is a problem, they can bow out without having to tell you exactly why. Credit is a highly personal matter that many people don’t like to share – even between parents and children.

Listen to any concerns your cosigner has and respond to them honestly. In subsequent academic years, you should revisit and update the case you made; once again showing the cosigner that you have carefully thought through this substantial obligation.

Applying for the loan

Once your cosigner agrees to help you, complete the application (either online or via phone) together with your cosigner. It is much more efficient if the process is handled in one session.

Shop around and compare private student loan options with SimpleTuition as part of your quest for college financing.

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