Most students do not worry themselves much when looking for a cosigner; they quickly rush to their parents. However, it may be complicated for a student if the parents are not around. The best thing is that it is possible to find private lenders who are flexible on guarantors who people can use as a guarantor. The terms include being a permanent US citizen with a good credit score along with a steady income. Asking someone to be a cosigner for a student is not something easy, so before one can look for one, he or she should consider the following:
- Reasons to find a cosigner
- How can one find a cosigner when parents are not available
- Steps to convince a consigner especially for foreign students
Reasons to find a cosigner
A cosigner is needed when applying for any federal loan, and private loans for students are an exception and up to 92% of loans applied by undergraduates need a cosigner. This is according to research done by MeasureOne. However, any undergraduate loan without a cosigner is available with a higher interest rate because the lender has no solid security.
It is therefore vital to look for a cosigner as he or she improves the loan applicant’s creditworthy. The cosigner is also responsible if the primary borrower defaults the loan. It gives the student a chance to improve their credit by making timely payment while paying lower interest. Being a cosigner is a huge responsibility and the reason most students prefer to have their parents take on it.
Steps To Convince a Consigner Especially For Foreign Students
Finding a loan cosigner is not a walk in the park for international students. Though essential to fund education, most credit unions, banks and different private lenders cannot lend any international students without a cosigner with permanent US residency. It takes a student some connections to find someone who can help them secure a loan. In such a case, a student’s parents cannot even help since they are not Americans. However, if one is lucky enough to have an aunt, uncle or any other relative who is a permanent resident in the US; they can easily qualify for the loan through one must be creditworthy.
For students who cannot find a cosigner, they can get a loan without a guarantor from reputable lenders such as MPower Financing. The only drawback is that the interest rate is high because there is no one with good credit standing by the borrower.
How Can One Find a Cosigner When Parents Are Not Available?
After a student has been unsuccessful in finding a loan cosigner, especially where parents are available, he or she can find other cosigners. Here are some options to students looking for willing cosigners and some that one should stay avoid.
Consider Close Family and Friends
The best way to get started when looking for an undergraduate loan cosigner is to start by asking close family and friends. This could be grandparents, an uncle or an auntie but they must have a good credit score. Senior members in a family are the best as cosigners because they have qualities to withstand the risks that come with a loan. Young people, such as siblings and cousins, may not help much. Their credit score is not well-built and are therefore still working on their credit history for future broad purposes including a mortgage application.
If no one in the family can help in the undergraduate loan application as a cosigner, a student should look beyond. There are real friends and lifelong mentors who can help. However, if one has to find such a person among social media friends, the possibility of finding a strong cosigner is slim.
Some of the best people to approach include a professor or a former teacher willing to support a student who they believe in. Nonetheless, this should be the last alternative after exhausting all avenues.
Avoid online cosigners
When desperate for a loan cosigner, one can look up for options online. Craigslist and other online classifieds do not offer any security, yet there are posts of companies claiming to specialize in matching students with perfect loan cosigners, but at a cost.
Some of the companies that offer such services are CosignerFinder.com and HireCosigner.com. They ask students to apply with personal details and amount of loan. After that, a student has to pay a certain amount. For example, HireACosigner charges from $29.99 up to $39.99 to help borrowers connect with professional cosigners with an excellent credit score.
These strangers, however, want something more for being a loan cosigner. Some may request for a small amount from the loan but will ask the borrower whether they are open to sharing the loan during the initial loan application stages. The Better Business Bureau says that most users of CosignerFinder.com request refunds. Besides, other crowdsourced sites, including Ripoff Report do not hold this website and its competitors with much regard.
Steps To Get a Cosigner
- The credit score, income and residency status of the cosigner must meet the required criteria. For example, college Aver Student Loans has an automatic tool to verify eligible cosigners.
- Let the cosigner know the risks involved, especially with international students. The following five questions can help explain and convince a cosigner to pick up the pen.
1. What is the amount of the loan?
2. Why borrow the specific amount?
3. What is the repayment plan?
4. How is the borrower equipped to repay the loan in case things go south?
5. What is the process of finding a cosigner?
These five questions enable the cosigner to understand what he or she is getting into.
Closing the deal
Every prospective and especially the hired ones, want to know the benefits and plans towards loan repayment. If everyone is satisfied, it’s time to close the deal.
Any student looking forward to getting financing for an undergraduate school or college education should know the right options of finding a cosigner. Some options are not so great, especially where parents do not qualify to be the cosigners. The paid cosigners should be the last resort but comes in handy whether other options have failed.