How to Pick a Good Student Loan Co-borrower

When delving into the world of private student loans, you may discover that many lenders mention a “co-borrower.” A co-borrower is someone who applies for the loan with you and is equally responsible for ensuring it is repaid. A private student loan will be held in your name as the primary borrower, but the co-borrower’s name and credit will be tied to the loan as well.

Why do you need a co-borrower?

Most high school and college-aged students have not yet built a good credit history, meaning lending to them is a bigger risk for financial institutions. They can’t look at your credit and payment history to be assured you will repay the loan. By applying with a co-borrower, you may have a better chance of being approved for a loan, and you may receive a lower interest rate.

Characteristics of a good co-borrower

First and foremost, a co-borrower needs to have established – and good – credit. They also will need proof of a stable income, and a low amount of debt. Specific criteria, including credit union membership requirements, vary by credit union.

Your co-borrower needs to be aware that while they may expect you to be the one who repays the loan, they are also legally responsible for making sure payments are made. They should be financially capable of making the loan payments if you become unable to make them yourself.

Who can be a co-borrower?

Parents are the most common co-borrowers on a student loan, but there may be reasons a parent isn’t the best (or available) choice. They may not be involved in a student’s life, or they may not have a strong enough credit history. Essentially anyone can be a co-borrower – a grandparent, another family member, or even a mentor or family friend, so long as they meet the criteria above.

If you are looking for a private student loan to help cover costs once you've exhausted options for scholarships, grants, and federal student we've got your back! Learn more about our options and apply online to make sure your costs are covered for fall semester.

If you have additional questions about paying for college, consult our College Counselor, who provides free, personalized guidance on paying for college and navigating your options.