Student Loan Cosigner: Learn the Advantages
What parents need to know about agreeing to be a student loan cosigner
Most students who apply for private loans to finance their higher education have a qualified, credit-worthy cosigner, which makes it more likely that they will be approved and at a lower interest rate. By securing the right signature from a financially responsible party of their choice (often a parent, legal guardian or family member) on the loan application, students can pursue the financing they'll need to complete their education.
That does not, however, change the fact that the student remains the primary borrower (except in cases where parents are actually taking out the loans themselves for their child's education). Agreeing to cosign a loan affirms that you will step in and take responsibility for paying the money back, in the event the primary borrower cannot. As a student loan cosigner, you assume equal responsibility for repayment of the loan.
Benefits of cosigning your child's student loan:
- Lower interest rates, which means less total borrowing
- Your child begins establishing their own credit history
- Release option available after 36 months
Chief among the advantages of a cosigned student loan is getting approved and obtaining lower interest rates. By leveraging your higher income and more extensive credit history, your student has the advantage of lowering their interest rates, which means lower overall repayment obligations. But because the loans are in their name, they can also begin establishing their own credit history when they begin repaying the loan.
With Citizens Bank's TruFit Student Loan™, cosigners also have the option of being released from their responsibilities after a period of 36 months of consecutive on-time payments, subject to certain terms and conditions.
Learn more about financing options from Citizens Bank
You can find helpful information about affordable financing for parents and other student loan resources. If you still have questions, call a student loan specialist at 1-800-708-6684, and we'll help walk you through the process of financing your child's education.
Additional student loan and college planning resources
- Planning for Your Child's Education
- Investment in an Education
- Using Loans to Pay for an Education
- Impact of Multiple Kids in College at Once