How to release a cosigner from your student loans

While most federal student loans don’t require a credit check, you’ll need good credit to qualify for private student loans — or a cosigner with good credit.

Having a cosigner with good credit by your side can make it easier to qualify for private student loans at better interest rates. In fact, student loan borrowers who enlist a cosigner with good credit qualify for interest rates that are about 2.36% lower than borrowers who don’t have cosigners, a Credible data analysis shows.

While adding a cosigner can be beneficial for borrowers, acting as a cosigner comes with a lot of risk. Understandably, cosigners may want to be released from their responsibility as soon as possible.

• 8 private student loans with a cosigner release option
• Requirements for cosigner release
• How to apply for cosigner release
• How to apply for a student loan
• Refinancing your student loans could release your cosigner
• Student loan cosigner FAQs

8 private student loans with a cosigner release option

Each lender has varying requirements when it comes to releasing cosigners, but as you’ll see in the following roundup of student loans with cosigner release, borrowers usually must make a certain amount of consecutive on-time payments on their loan before they can release their cosigner.

You can compare student loan rates from these lenders in minutes when you use Credible.

Requirements for cosigner release

Each lender has different requirements when it comes to releasing a cosigner from a student loan. If you’re planning to release your cosigner, you need to make sure you understand your lender’s requirements before you take out the loan. Here are a few common cosigner release requirements:

• Make on-time payments. You may be able to release your cosigner after you’ve made a certain number of consecutive on-time payments.
• Meet credit requirements. Having a high credit score can help you qualify to release a cosigner.
• Graduate from college. You may need to meet dual requirements, like making consecutive on-time payments and graduating from college.

HOW TO FIND A PRIVATE STUDENT LOAN COSIGNER

How to apply for cosigner release

When it comes time to release a cosigner, each lender has different requirements for its application process. You’ll typically need to provide proof in the application of your:

• Income
• Credit score
• Lack of bankruptcies or foreclosures
• Graduation

If you’re ready to apply for cosigner release, you can expect to take the following steps:

1. Contact your lender and request the application form. Again, each lender has a different cosigner release application, but it can guide you through the process.
2. Complete the application. Complete the application carefully and follow any requested steps.
3. Provide proof of any requirements for release. Part of the application process will include providing proof of the lender’s qualifications for releasing a cosigner, such as having a certain income or credit score.
4. Thank your cosigner. When all is said and done, don’t forget to thank your cosigner for their support!

How to apply for a student loan

You should always exhaust all your federal student loan options before turning to private student loans. You apply for federal loans by completing the FAFSA. If you decide that a private student loan is the right fit for your financing needs, these are the steps you’ll generally take to apply for a loan through a private lender:

1. Comparison shop. Before choosing a private student loan lender, do some comparison shopping to see which lenders will offer you the lowest interest rates and fees and the most favorable terms. You can also take in-school deferment options and potential repayment schedules into consideration.
2. Prequalify with different lenders. Once you get a general idea of which private lenders might be the right fit for your financial needs, you can prequalify to get an idea of the loan terms you’re likely to qualify for. This should include loan amounts and interest rates. Prequalifying is not a guarantee you’ll get a loan, but it’ll give you a more-tailored idea of the rates and terms you might qualify for. Prequalifying doesn’t affect your credit (soft inquiry) like an official application does (hard inquiry), so you can prequalify for as many student loans as you want.
3. Find a cosigner. If you need a cosigner to qualify for a private student loan or to qualify for better interest rates, talk to a trusted family member, like a parent or friend, about acting as your cosigner. Make sure they’re comfortably onboard with the arrangement.
4. Fill out the application with a cosigner. Finally, you’ll fill out the private student loan application with your cosigner to complete the process. If you’re approved, you’ll receive the funding you need to pay for school.

When shopping for student loans, check out what interest rates each lender is likely to offer you. Remember, you can get a much clearer idea of these interest rates if you prequalify. You can use a student loan calculator to help you calculate how much the different interest rates will cost you over the life of your loan.

HOW TO REFINANCE STUDENT LOANS WITH BAD CREDIT

Refinancing your student loans could release your cosigner

Cosigner release isn’t available to everyone — some lenders don’t offer it, and some borrowers won’t qualify for it.

If you’re not approved for a cosigner release and are committed to releasing your cosigner from their obligations, refinancing the student loan in just your name could be another way to release your cosigner.

Student loan refinancing involves taking out a new student loan and having the new lender pay off your original student loan or multiple student loans. Ideally, your new student loan will come with a better interest rate so you can save more money over the life of the loan. If you’ve improved your credit score or income since first applying for your original student loan, you may be able to qualify for more-favorable rates through refinancing.

It’s worth noting that you can apply to refinance with the assistance of a cosigner if you’re simply looking for a better interest rate, a new repayment term, or to consolidate multiple loans. Certain cosigners — like your parents — who’ve seen you make consistent on-time payments may not mind cosigning on the new refinanced loan if it helps you save money and have an easier time repaying your student loans.

Refinancing your student loan without the help of a cosigner is a lot easier if you have the credit score that most lenders are looking for. Having a FICO Score of 670 or higher can make it easier to qualify to refinance at favorable interest rates and loan terms. The higher your credit score is, the better your interest rate is likely to be and the less you’ll pay on interest over the life of your student loan — provided you don’t extend your repayment term.

Student loan cosigner FAQs

Here are answers to some frequently asked questions about cosigners on student loans.

Can you remove yourself from a cosigned student loan?

No, if you’re a cosigner, you can’t remove yourself from a student loan. The original borrower needs to take the steps to apply to release their cosigner. The original borrower usually needs to make a certain number of consecutive on-time payments to qualify to release their cosigner.

Do late payments affect the cosigner?

Yes, late payments can affect the cosigner. Not only do late payments not count toward the consecutive payments needed to qualify for releasing a cosigner, they can also hurt the cosigner’s credit score. That’s why it’s so important that cosigners understand the responsibility they’re taking on, and that the borrower has a plan to make on-time payments month after month.

How long is a cosigner responsible for the loan?

Cosigning on a loan makes the cosigner equally responsible for the entirety of the debt. For as long as the loan needs repayment, the cosigner is responsible for it. Ideally, the original borrower will make all their payments on-time and the cosigner will never need to make a payment.