4 Signs You Need a Co-Signer for Your Student Loan


Don’t take it personally, but some lenders see you as a flight risk.

That’s why they won’t approve you for a student loan without a co-signer. A co-signer is the one assumes responsibility for your debt in the event you can’t pay it back.

In fact, most students won’t qualify for a private student loan without a credit-worthy co-signer. And even they could, they’d likely qualify for better terms by applying with a financially stable parent or friend.

Here are four signs you need a loan co-signer to borrow funds for college.

1. You need a private student loan

According to the Consumer Financial Protection Bureau (CFPB), over 90 percent of private student loans were co-signed in 2011. Although the CFPB has not released more recent data, it’s likely the vast majority of private student loans continue to require co-signers today.

Private student loans come from banks or independent lenders, such as Citizens Bank and CommonBond. Most private lenders want a loan co-signer if your credit score and income don’t meet their requirements. Some lenders request all undergraduate and graduate student loans have a co-signer, regardless of your financial circumstances.

Federal student loans, however, typically do not require a co-signer. Undergraduates can borrow up to $31,000, and grad students can take out a maximum of $138,500. With the average cost of a private four-year college at $32,410 for just one year, according to CollegeBoard, many students need more money.

For additional funds, you’ll have to borrow from a private lender — and will probably need a co-signer to qualify.

2. Your credit score is low

When reviewing your application for a student loan, private lenders take a look at your credit score. Credit scores are based on a number of factors, including your credit card history, debt repayment record, and debt-to-income ratio.

If you’re an 18-year-old who’s never had a credit card, you won’t have a strong credit score yet. You’ll need to apply for a student loan with someone who does.

Although most lenders don’t set a specific credit score cutoff, some experts suggest you need a score of 650 or higher. If your score falls below 650, you’ll need to apply for loans with a co-signer.

3. You don’t have many years of positive credit history

Beyond your credit score, the length of your credit history is also a factor. Lenders want to see several years of responsible credit card use and on-time payments of any debt.

If you have a mark on your report — defaulting on a loan or declaring bankruptcy — lenders will see it as a red flag.

Without a good credit history, you’ll need to apply for a loan with a co-signer with a positive credit history. They will need a few years of strong credit with no recent derogatory marks.

4. You have little to no income

In addition to your credit, lenders also look at your income when approving you for a loan. Your income indicates if you’ll have the means to pay back your debt.

If you’re going to college or grad school, you might have no income. You’re investing in your education so you can have a high-paying job after graduation.

But lenders aren’t willing to wait and see. If you don’t have much income at the time of application, you’ll probably have to apply for a loan with a co-signer who does.

Some lenders offer co-signer release

Asking someone to be on the hook for your student debt is a big request. Your co-signer must agree to foot the bill in the event you can’t pay back your debt.

But they might not be accountable for your student loans forever. Some lenders offer co-signer release after a period of on-time payments.

Citizens Bank, for instance, can release your co-signer after 36 months. And CommonBond requires just 24 months of on-time student loan payments.

So even if your co-signer joins your loan, they might not be responsible for the debt forever. For more on co-signer release, check out this complete guide for parents.

Need a student loan?

Here are our top student loan lenders of 2018!
LenderRates (APR)Eligibility 

1 = Citizens Disclaimer.

2 = CollegeAve Autopay Disclaimer: The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.

* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of
Smart Option Student Loan customers.

3 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3.92% -
Undergraduate, Graduate, and ParentsVisit CollegeAve
3.62% - 11.85%*3Undergraduate and GraduateVisit SallieMae
2.93% -
Undergraduate, Graduate, and ParentsVisit CommonBond
3.46% -
Undergraduate, Graduate, and ParentsVisit Citizens
4.21% - 9.69%Undergraduate and GraduateVisit LendKey
3.35% - 10.89%Undergraduate and GraduateVisit Connext
Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print, understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.