Tips on selecting a cosigner

“Cosigner” defined

tips on selecting a cosignerA cosigner of a private student loan is someone who jointly signs the promissory note (or the contract between lender and borrower) for the loan. Even though the student is the primary borrower, and will receive monthly bills and make payments, the cosigner is equally and jointly responsible for the loan’s repayment.

The cosigner’s responsibility

If the student fails to repay according to the terms of the loan agreement, the cosigner will be responsible for payments. The cosigner’s credit would likely be negatively impacted if the student borrower misses a payment or defaults on the obligation. Also, private student loans typically have repayment lengths of 10-15 years or more – making this a long-term relationship.

Cosigning can expand opportunities for the student

Cosigning a private student loan is a serious step. Nonetheless, cosigning a loan for a student borrower can literally make a college education possible.

Here are some reasons why private student loans are used by so many borrowers:

 

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