How to Refinance Student Loans With a Cosigner

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Adding a cosigner on a loan – from a personal loan to an auto loan to a mortgage – can help you achieve better terms than if you were to apply on your own.

But did you know that you may also be able to take advantage of the benefits of a cosigner when refinancing student loans? Adding a cosigner when refinancing can make it easier to qualify, plus get the lowest interest rates.

While someone cosigning a student loan does have benefits for you, it’s important carefully weigh these against potential downsides. Here’s what you need to know about the options for refinancing your student loan with the help of a cosigner.

Cosigning a student loan: What lenders require when refinancing

The specifics for refinancing student loans with a cosigner depend on the particular lender. Some lenders will let you apply for student loan refinancing with a cosigner from the get-go. Others will allow you to re-apply for a loan with a cosigner only after an initial rejection.

There are several underwriting factors lenders consider. Applying for student loan refinancing is often the only way to find out if you qualify on your own or need a cosigner.

Some refinancing companies, such as Earnest and CommonBond will first process your refinancing application without a cosigner. If you don’t qualify on your own, these lenders will then assess your eligibility with a cosigner. Rather than reject your application outright, they might invite you to find a cosigner and re-apply.

Other companies, such as PenFed and Citizens Bank, allow you to apply with a cosigner from the start. This can be helpful if you’re unsure you’ll qualify. As Citizens Bank states in its FAQ section, “Although a co-signer is not required, if you have little or no credit history, we strongly encourage you to apply with a qualified co-signer to increase your chances of being approved.”

Similarly, Laurel Road makes it clear that borrowers with incomes below $50,000 likely need a cosigner to qualify.

Some lenders will also consider the higher of you and your cosigner’s two credit scores to set interest rates. This will help you get the best deal on student loan refinancing. Adding a cosigner can also make sense if they’re someone you share finances with, such as a spouse.

What will your lender look for in a cosigner?

Not only do you need to find the right lender – you also will need a cosigner who is well-qualified and willing to sign with you.

To increase your chances of being approved for student loan refinancing and qualifying for the best rates, your cosigner should meet the following standards:

1. Good credit

The most common reason a primary borrower might turn to a cosigner is bad credit or an insufficient credit history. Different lenders have different credit requirements for their primary borrowers and cosigners. However, you can assume that a cosigner with a credit score of 700 or above will offer you the best chance of landing the loan. They’ll also most likely qualify for more attractive rates.

2. Sufficient income

Many primary borrowers looking to refinance student loans are not yet established in their careers, which means their income might be too low or unreliable to qualify on their own. Lenders want to see that cosigners have sufficient, steady income to pay off the loan if the primary borrower cannot make the monthly payments.

Your bank will ask for both of your pay stubs, among other documents, to determine your income and debt-to-income ratio. If your cosigner makes a good living but already owes a great deal compared to their income, they might not qualify for the loan.

Your lender will calculate the debt-to-income ratio, including the payment of the loan you are applying for. Even if your cosigner does not intend to make payments, the cosigned loan might push your cosigner above the lender’s preferred debt-to-income ratio.

3. Work and home stability

Lenders want to see that cosigners have a stable work and residence history. That means a cosigner who earns a high income but has frequently switched jobs might not be approved since his work history may appear unstable.

Similarly, a cosigner who has lived in the same residence for five or more years will be looked at much more favorably than a cosigner who moves every two years. This stability is another reason why a cosigner can help a young primary borrower. Young adults just out college haven’t had the time to build up a stable work or residence history.

The process of refinancing student loans with a cosigner

The process of adding a cosigner to a loan is similar to applying for a loan, with a couple added steps. Here’s the process to follow when you’re refinancing student loans with a cosigner.

1. Find a lender that allows cosigners on student loan refinancing

We’ve named a few lenders above that allow cosigners when refinancing student loans, and also offer great rates and other benefits. Do your research and compare lenders.

2. Get a cosigner onboard to refinance student loans

Hopefully, you have someone in mind who meets the qualifications outlined above to be a good cosigner. You’ll need to ask this person if they are willing to be your student loan cosigner. Make sure each of you understands the risks and responsibilities that come with cosigning before you agree.

3. Collect documents and information needed to apply

You will need to be ready with basic personal information for both you and your cosigner. Collect your Social Security number, employment information, financial information, monthly mortgage or rent payments, and permanent address.

If your cosigner prefers not to share this sensitive personal information with you, that’s okay. They will just have to be involved in the application process to provide their relevant information as needed.

3. Compare student loan refinancing rates

Typically, the first step in applying for student loan refinancing is not a full application, but a credit check. Most lenders will ask for preliminary information and use that to perform a soft credit pull. This gives them a snapshot of your creditworthiness and allows them to provide you an estimate of the rates for which you qualify.

Whether you include a cosigner at this stage will depend on the lender you choose and how they handle adding cosigners.

4. Apply for student loan refinancing

Once you’ve picked an offer that you like, it’s time to apply for student loan refinancing. Make sure you accurately provide all information for both yourself and your cosigner. Provide any documentation of income or other financial records the lender asks for.

5. Sign the student loan refinancing agreement

If you’re approved for a loan, the lender will send you a final loan agreement laying out the terms of refinancing. This loan agreement will include your cosigner and outline their liability for the new student loan. Both you and the cosigner will need to sign and agree to the terms of the contract.

Either party can back out of the loan at any time before the primary borrower signs off on the final loan terms.

6. Repay the refinanced student loans with a cosigner

The first payment due date and monthly payment amounts will be outlined in the loan agreement. Once you and your cosigner have signed on the dotted line, you will begin making payments each month.

It’s important to remember that your cosigner is not just there for moral support; they are legally responsible for repaying your loan should you default.

In some cases, you and your cosigner may choose to make repayment a joint effort. Make sure you both understand your agreed-upon repayment plan and schedule. This way, you can avoid someone accidentally missing a payment.

Understand the risks for your cosigner

If you have a family member, spouse, or parent cosigning a student loan with you. it may seem like the perfect solution to overwhelming student loan payments. However, there are potential problems that fall disproportionately on the cosigner.

That’s because cosigners share full responsibility of the loan with the primary borrower. Their liability for the loan can affect their own credit, for better or worse. It’s possible it could keep them from qualifying for other credit since the cosigned loan appears on their credit report.

Furthermore, if the primary borrower does not make consistent payments on the loan, the late or defaulted payments will negatively impact the cosigner’s credit score.

Can you release a cosigner after refinancing student loans?

Considering the risks a cosigner takes on, some student loan refinancing companies have options in place to allow primary borrowers to eventually release their cosigners.

Specifically, Earnest and Citizens Bank will both allow the primary borrower to discharge their cosigner after 36 consecutive months of on-time payments. However, most other lenders require cosigners to remain jointly responsible with the primary borrower for the life of the loan.

It’s also important to note that even the banks that do allow discharging of the cosigner still require the primary borrower to initiate the process.

Is it worth it to have a cosigner when refinancing student loans?

This situation comes with the potential to damage both your own and your cosigner’s financial standings and the relationship. As the primary borrower, you need to consider carefully before asking someone to cosign student loan refinancing.

In particular, make sure you have satisfactory answers to the following questions:

  • Why do you need a cosigner? Do you need a cosigner because your credit score and money management skills are less than robust? That might be a warning sign that taking on a cosigner is a bad idea. It might be worthwhile to spend several months building credit so you can instead refinance on your own.
  • How could this cosigned loan affect our relationship? Money issues have a way of sourcing relationships, and you will have to deal with uncomfortable relationship dynamics as well as financial stress if you have trouble making payments after someone has cosigned for you.
  • What happens if either you or your cosigner passes away before paying off the loan? Generally, cosigners on private student loans and privately refinanced student loans are legally responsible for the debt if the primary borrower dies. And if your student loan cosigner dies, your debt might automatically enter default. Make sure you and your cosigner are completely clear on what to expect should the worst happen.
  • Are you comfortable communicating with your cosigner? If the person you have chosen as your cosigner is not someone you’d feel comfortable sharing personal financial details with, you might want to rethink asking them to cosign your loan.
  • Do you need a cosigner for student loan refinancing? The incredible rates that lenders offer for student loan refinancing may only be available to some primary borrowers if they take on a well-qualified cosigner. However, borrowers need to recognize that asking a friend or family member to be a cosigner is a major commitment, and it does not necessarily guarantee the best loan rates.

Use these questions to guide you through the decision of whether or not to refinance with a cosigner. Have open and honest discussions about the process of cosigning before you refinance your student debt.

Make sure you and your cosigner enter into a loan with your eyes open and commit to honest communication with each other throughout repayment.

Elyssa Kirkham contributed to this article.

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1 Important Disclosures for Earnest.

Earnest Disclosures

To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.

Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 5.87% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 5.87% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.

Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.

The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at hello@earnest.com, or call 888-601-2801 for more information on ourstudent loan refinance product.

© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.


2 Important Disclosures for Laurel Road.

Laurel Road Disclosures

  1. VARIABLE APR – APR is subject to increase after consummation. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes.

3 Important Disclosures for SoFi.

SoFi Disclosures

  1. Student loan Refinance: Fixed rates from 3.899% APR to 8.179% APR (with AutoPay). Variable rates from 2.570% APR to 6.980% APR (with AutoPay). Interest rates on variable rate loans are capped at either 8.95% or 9.95% depending on term of loan. SoFi rate ranges are current as of September 14, 2018 and are subject to change without notice. See APR examples and terms. Lowest variable rate of 2.570% APR assumes the current index rate derived from the 1-month LIBOR of 2.08% plus 0.740% margin minus 0.25% AutoPay discount. Not all borrowers receive the lowest rate. If approved for a loan, the fixed or variable interest rate offered will depend on your creditworthiness, and the term of the loan and other factors, and will be within the ranges of rates listed above. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. *To check the rates and terms you qualify for, SoFi conducts a soft credit inquiry. Unlike hard credit inquiries, soft credit inquiries (or soft credit pulls) do not impact your credit score. Soft credit inquiries allow SoFi to show you what rates and terms SoFi can offer you up front. After seeing your rates, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit inquiry. Hard credit inquiries (or hard credit pulls) are required for SoFi to be able to issue you a loan. In addition to requiring your explicit permission, these credit pulls may impact your credit score.
  2. Terms and Conditions Apply. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

4 Important Disclosures for LendKey.

LendKey Disclosures

Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.


5 Important Disclosures for CommonBond.

CommonBond Disclosures

  1. Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). The following table displays the estimated monthly payment, total interest, and Annual Percentage Rates (APR) for a $10,000 loan. The Annual Percentage Rate (APR) shown for each in-school loan product reflects the accruing interest, the effect of one-time capitalization of interest at the end of a deferment period, a 2% origination fee, and the applicable Repayment Plan. All loans are eligible for a 0.25% reduction in interest rate by agreeing to automatic payment withdrawals once in repayment, which is reflected in the interest rates and APRs displayed. Variable rates may increase after consummation. All variable rates are based on a 1-month LIBOR assumption of 2.08% effective July 25, 2018.

6 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Education Refinance Loan Rate DisclosureVariable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2018, the one-month LIBOR rate is 2.07%. Variable interest rates range from 2.57%-8.17% (2.57%-8.17% APR) and will fluctuate over the term of the borrower’s loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a cosigner. Fixed interest rates range from 3.75%-8.69% (3.75%-8.69% APR) based on applicable terms, level of degree earned and presence of a cosigner. Lowest rates shown require application with a cosigner, are for eligible, creditworthy applicants with a graduate level degree, require a 5-year repayment term and include our Loyalty discount and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty and Automatic Payment Discount disclosures. The maximum variable rate on the Education Refinance Loan is the greater of 21.00% or Prime Rate plus 9.00%. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of their loan.
  2. Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer with the Education Refinance Loan. Borrowers should carefully review their current benefits, especially if they work in public service, are in the military, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans and replace those with the benefits of the Education Refinance Loan. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision at http://www.citizensbank.com/EdRefinance, including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.
  3. Citizens Bank Education Refinance Loan Eligibility: Eligible applicants may not be currently enrolled, must be in repayment of their existing student loan(s) and must make the minimum number of payments after leaving school. Primary borrowers must be a U.S. citizen, permanent resident or resident alien with a valid U.S. Social Security Number residing in the United States. Resident aliens must apply with a co-signer who is a U.S. citizen or permanent resident. The co-signer (if applicable) must be a U.S. citizen or permanent resident with a valid U.S. Social Security Number residing in the United States. For applicants who have not attained the age of majority in their state of residence, a co-signer will be required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Education Refinance Loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, certification of borrower’s student loan amount(s) and highest degree earned.
  4. Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  5. Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
  6. Co-signer Release: Borrowers may apply for co-signer release after making 36 consecutive on-time payments of principal and interest. For the purpose of the application for co-signer release, on-time payments are defined as payments received within 15 days of the due date. Interest only payments do not qualify. The borrower must meet certain credit and eligibility guidelines when applying for the co-signer release. Borrowers must complete an application for release and provide income verification documents as part of the review. Borrowers who use deferment or forbearance will need to make 36 consecutive on-time payments after reentering repayment to qualify for release. The borrower applying for co-signer release must be a U.S. citizen or permanent resident. If an application for co-signer release is denied, the borrower may not reapply for co-signer release until at least one year from the date the application for co-signer release was received. Terms and conditions apply.
  7. Estimated average savings amount is based on 14,659 Education Refinance Loan customers who saved on loans between August 1, 2017 and July 31, 2018. The calculation is derived by averaging monthly savings across Education Refinance Loan customers whose payment amounts decreased after refinancing, calculated by taking the monthly payment prior to refinancing minus the monthly payment after refinancing. We excluded monthly savings from customers that exceeded $4,375 and were lower than $20 to minimize risk of data error skewing the savings amounts. Savings will vary based on interest rates, balances and remaining repayment term of loans to be refinanced. Borrower’s overall repayment amount may be higher than the loans they are refinancing even if monthly payments are lower.

2.57% – 6.98%3Undergrad
& Graduate
Visit SoFi
2.47% – 5.87%1Undergrad
& Graduate
Visit Earnest
2.47% – 8.03%4Undergrad
& Graduate
Visit Lendkey
2.80% – 6.22%2Undergrad
& Graduate
Visit Laurel Road
2.48% – 6.25%5Undergrad
& Graduate
Visit CommonBond
2.57% – 8.17%6Undergrad
& Graduate
Visit Citizens
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.