Student loans, without any doubt, have proven to be a blessing in disguise for those who cannot afford their tuition fees. Student loans are generally available on easy terms; thus, they make for a great way for students to complete their studies without facing a major financial crunch. However, there are certain situations, when getting a student loan can prove to be a daunting task; thus, the applicant is left with no other option but to get a co-signer on board. A co-signer takes equal responsibility of repaying the loan amount if the primary borrower fails to do so.
Have a look at some of the conditions where it becomes inevitable for a student to take help of a co-signer to get a student loan:
Poor Credit Score
If you have a poor credit score, chances are that you will require the assistance of a co-signer to get your student loan application approved. A good credit score serves as a testimony for an individual’s creditworthiness. Therefore, if a person doesn’t have a good credit score, it is assumed that they will not be able to repay the loan amount. In such a situation, the lender doesn’t approve the loan application if there is no co-signer.
Poor Credit History
Apart from credit score, credit history is another factor taken into consideration to adjudge the creditworthiness or solvency of the applicant. If an individual doesn’t have a good credit history, they might be required to get a co-signer to sign the loan agreement. Things considered in a credit history include payments on debts on time, use of credit cards and other instruments etc.
No Permanent Source of Income
Generally, student loans are to be repaid in form of installments. Thus, at the time of giving the loan, the bank or the lender ensures the applicant has a sound source of income, which most of the applicants do not. This is because they are financing their education by obtaining this type of loan in order to carve a bright future of them. However, lenders do not take into consideration the future perspectives and approve the loan application based on the current conditions. This is why if a person doesn’t have a permanent source of income, they need to get a co-signer.
In Case of Private Student Loans
If you want a private student loan, there is generally no requirement of a co-signer. For this purpose, you need to obtain a Federal Student Loan as there is no such condition associated with them. However, keep in mind that these loans are given for a limited amount. Thus, if you require additional funds, contact a private lender and for this, you may need a co-signer.
Simply put, a co-signer can make it easy for you to get a loan. However, it puts their credit score and history at stake as well if you are unable to repay the loan on time. Hence, it is advised to take the decision of taking help of a co-signer tactfully.