If you've been asked to serve as a cosigner, that's quite a compliment! Someone has a lot of trust in you, and you're probably doing a great job of managing your money and your credit. What exactly does it mean though, to cosign for a loan? Here's exactly what you're committing to, start to finish, as a student loan cosigner.
You complete a short loan application.
Your first step is completing a shortened loan application. This will include assembling a few documents, such as recent paystubs to demonstrate your income, and authorizing a hard credit inquiry by the lender to ensure you meet the underwriting criteria for that particular loan option. When the underwriting team decides you're a good fit, you're nearly done! All that's left is for the member to finalize his or her application and for you both to co-sign for the loan.
You help your friend or loved one get a better rate.
You were likely asked to be a cosigner to help a member get a better interest rate on their student loan (or, in other cases, to qualify for that loan). When you become a cosigner, you enable the member to get an interest rate he or she could not have received without your help. You will have saved this person as much as thousands of dollars in interest and improved his or her financial outlook for the entire life of the loan.
You carry the same debt, but you can be released.
Cosigning for debt is not a small commitment —you'll carry this outstanding loan on your personal credit history and be responsible for repaying the loan in the event that the member cannot. However, a few lending platforms, including CommonBond, offer a cosigner release option. If the member makes consecutive, on-time payments with CommonBond's refinanced loans for three years, he or she can apply for you to be released as a cosigner on the loan. The CommonBond team will review the request and the applicant's file, and if the member meets our specific underwriting criteria on his or her own, you can be released from the loan.
If either you or your cosigner would like more information on this process, don't hesitate to contact our Care Team at email@example.com or call us at (800) 975-7812.