A co-signer is someone who puts their signature on a loan alongside your own. Co-signers can be used for a wide range of lending situations, from mortgages to student loans. It is important to understand what a co-signer is agreeing to before going through with this kind of arrangement.
These are a few top considerations:
- Co-signers are signing the loan, which means they are obligated to pay if the primary borrower does not. This can lead to financial distress and credit damage to the co-signer.
- Missed payments affect all those listed on a loan. This means every time the borrower misses a payment, it can ding the co-signer’s credit.
- You might end up getting chased down by debt collectors if you are a co-signer on a loan that isn’t repaid.
Clearly, it is important for a co-signer and a student loan borrower to understand this before entering into an agreement. For some people, this might be a fine arrangement. But others might not be so into this idea.
So, is it possible to get a grad school loan without a co-signer?
Do You Need a Co-Signer for Grad School Loans?
People looking to advance their educations might be wondering if they need to have a co-signer in order to obtain loans. After all, proper funding is essential for being able to afford university tuition, books, and board. No federal student loans for undergraduates require a co-signer, and it is also possible to get grad PLUS loans without one as well. Though, having a co-signer for grad PLUS can potentially help you get more money.
Many of those applying for graduate school are employed or have a longer credit history, which can be helpful when seeking out graduate student loans. Despite this, there are many private loans that will still require a co-signer. Fortunately, there are options out there for those who can’t get all the loans they need through federal money and also don’t have a co-signer.
Juno is one platform that has come up with a novel solution to this issue. They take bids from a wide range of private lenders, and negotiate the best possible deal for their group members. This gets you a guaranteed best-rate loan, without having to even pay any fees to access the deal. No one is required to bring a co-signer. However, it is understood you will be able to get an even better rate if you do have one. This is a great alternative for those who need additional money in order to pay for grad school, but aren’t entirely sure they have a co-signer for private loans.
When Should You Consider Getting or Being a Co-Signer for Grad School Loans?
There are a lot of people out there who desperately want someone to co-sign on their student loans. Some are even offering to pay individuals with good credit to be their co-signer. This is a sign of how badly people need funding in order to pay for school, but also of how drastically programs that require no co-signer can change the landscape.
Remember, when someone co-signs a loan, they become liable for paying if the primary borrower stops doing so. This is incredibly risky for someone to do if they only have a casual relationship with the person seeking financial assistance. While you do not want to be a co-signer unless you really know and trust the borrower, there are things to consider for the student as well.
Failing to pay on a loan can seriously damage your relationship with your co-signer. Hopefully, they will understand; but there is no guarantee of this. It’s almost always best to get a loan without a co-signer if it’s possible. Those who need additional assistance beyond federal loans for grad school should think carefully before taking on a loan with a co-signer. There are options out there that can help you get around this process.