Should You Refinance Student Loans With a Cosigner?

Applying to refinance student loans with a cosigner could help you qualify for lower interest rates, especially if you don’t have excellent credit on your own. A friend or family member who agrees to cosign debt will see their debt-to-income ratio increase, which affects their credit score—so it’s a significant request.                  . 

Here’s how to determine whether refinancing your student loans with a cosigner is the best choice for both parties.

How does a cosigner affect your ability to refinance?

A cosigner is often a trusted friend or relative who agrees to sign as an additional loan borrower. They’re responsible for repaying the debt if the borrower stops making payments. 

If you’re concerned about getting approved for a student loan refinance, a cosigner might help in the following ways. 

• Better loan terms: If your cosigner has a higher credit score than you, they may be able to help you secure better loan terms—such as a lower interest rate or fewer fees—than you’ll get on your own. 
• Stronger application: If you don’t have a long credit history, but your cosigner does, they might be able to vouch for you with the loan. Your lender will consider your and your cosigner’s credit history when deciding whether to approve your application. 
• Meet the requirements: Lenders have specific requirements for loans. These can range from income amounts to age. If you don’t meet the requirements, a cosigner might help. 

Are there risks to refinancing student loans with a cosigner?

Refinancing student loans with a cosigner comes with several risks. Consider these potential downsides before enlisting a cosigner to share your student debt: 

• Harm to credit score: How you handle your student loans will affect your and your cosigner’s credit. Missed payments can damage both of your credit scores. Late payments can stay on a credit report for seven years. 
• Ability to borrow in the future: Your loan is considered the debt of your cosigner as much as your own. It will increase their debt-to-income ratio (DTI), an important factor when applying for financing. If your cosigner’sDTI is too high, they could have trouble qualifying for a new auto loan or mortgage. Many lenders prefer a DTI below 36%. 

• Responsibility to pay: Your cosigner shares responsibility for your refinanced student loan. The lender will expect them to make past-due payments if you fall behind. 
• It’s difficult to back out: A cosigner may be able to relinquish responsibility for the loan through cosigner release, but this requires you, the primary borrower, to have a sufficient on-time payment history. The lender and borrower must agree to the release, and some companies don’t offer the option.
• Tension in the relationship: Asking someone to cosign your debt has the potential to strain your relationship, especially if you don’t make payments on time and harm your cosigner’s finances. Be sure to have a clear discussion about expectations around repayment before adding a cosigner to your loan application. 

Should you refinance your student loans with a cosigner?

When you refinance your student loans with a cosigner, you can benefit as a primary borrower. 

Here are several scenarios where it might and might not make sense to use a cosigner.

Keep reading for more about each scenario in the table below.

Refinance with a cosigner if…	Don’t refinance with a cosigner if…
✅ You need to increase your chances of approval	❌ You can’t find a suitable cosigner
✅ You’re looking for better rates and terms	❌ You don’t want to mix money and relationships
✅ You’re an international applicant	❌ You can’t commit to paying on time
✅ You have a family member who wants to help	❌ You can get approved for a low rate on your own

Refinance with a cosigner if…

You need to increase your chances of approval

To get approved for student loan refinancing, you need to meet a lender’s requirements for credit and income. This might be difficult if you’re just out of college or don’t have good credit or a high income. 

Applying with a cosigner, especially someone who has good credit and a steady income, can increase your chances of getting approved for student loan refinancing. 

You’re looking for better rates and terms

In lenders’ eyes, a qualified cosigner reduces the riskiness of the loan. When you have a cosigner, lenders are often more willing to offer favorable terms and low rates. Reducing your interest rate even a small amount could save you hundreds or even thousands of dollars over the life of your student loan debt. 

You’re an international applicant 

If you’re not a U.S. citizen or permanent resident, some lenders require you to have financial backing from someone who lives in the U.S. to obtain a loan. In this scenario, it can be helpful to have a U.S. citizen cosigner.

You have a family member who wants to help

If you have a parent, grandparent, or other relative who would like to help, it’s worth considering whether refinancing with a cosigner would be the right move. The ideal cosigner has good credit and a solid income, as well as understands the responsibilities that go into cosigning debt. If you’re confident you can repay the loan, you can reap the benefits of a cosigner without worrying about falling behind on payments and damaging their credit. 

Don’t refinance with a cosigner if…

Here’s why it might not make sense to refinance student loans with a cosigner in certain instances. 

You can’t find a suitable cosigner

Many people are unwilling to be cosigners because of the impact cosigning could have on their finances. Even if someone is willing, they may not be eligible to be a cosigner, or their cosigning may not help you much if they don’t have good credit or a stable income. 

You don’t want to mix money and relationships

Mixing family and money can create problems. Asking relatives to serve as cosigners could be a tense conversation, and there may be hard feelings if they say no. If they say yes and you end up missing payments and damaging their credit, that could also harm the relationship.

You can’t commit to paying on time

Since the cosigner is legally responsible for repaying your debt, your financial actions can affect them. Nonpayment could ruin the cosigner’s credit, and they could get stuck with the bill. 

Even if you pay, the additional debt on the cosigner’s credit could affect their ability to qualify for other loans because your debt raises their DTI.

You can get approved for a low rate on your own

Don’t assume that because you needed a cosigner to take out private student loans, you’ll need one when you refinance. If you’ve made on-time payments on any debt you’ve taken out and have a steady income, you might qualify for a refinance loan on your own.

Start by checking your credit. (Many banks, credit card companies, and other lenders offer free credit score access to customers. If yours doesn’t, you can use a free service such as Credit Karma, Mint,  or Credit Sesame to view your credit score.) Then consider seeing whether you prequalify on your own with top lenders and what rates you might be eligible for.

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Tip

Prioritize lenders that will let you prequalify with a soft credit pull, which won’t harm your credit score.

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Can a cosigner be released from a refinance loan?

Some lenders offer cosigner release after a certain number of on-time payments. Cosigner release is not guaranteed or automatic, and you’ll need to apply for it once you become eligible.

The rules around cosigner release vary by lender. Some lenders let you apply after 24 consecutive, on-time payments, and others ask for 36 payments or more. One lender on the list below—College Ave—only offers this option after half of your original repayment term has elapsed. 

Applying with a lender that offers cosigner release may be an appealing option. You can reap the benefits of applying with a cosigner, such as getting a better interest rate on your loan, and eventually let them off the hook for your debt. 

If your credit and income has improved significantly (or if interest rates are now lower), you might also consider refinancing your student loans again for better rates. Here’s a closer look at lenders that let you refinance student loans with a cosigner. Most offer the option of cosigner release. 

Companies that allow you to refinance student loans with a cosigner

The following companies allow you to refinance student loans with a cosigner. It’s always wise to shop around and ensure you get the best terms available. Click the lender’s name in the table below to see more about its refinance loans.

Lender	Payments required for cosigner release
College Ave	Half the original payment term
ELFI	Not available, but can apply to refinance again on your own
SoFi	24
Laurel Road	36

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College Ave

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Editorial rating: 4.2 out of 5

• Refinance with a variable or fixed rate
• No application or origination fees

College Ave offers a variety of repayment terms, letting you choose from 11 options so you can find the monthly payment that works for your budget. You can choose between a fixed and variable interest rate, and it doesn’t charge application or origination fees. 

The maximum loan amount is $150,000, $300,000, or $500,000, depending on your degree type. College Ave has a lengthier repayment requirement than before you can apply for cosigner release than many competitors. 

You’re only eligible once half of your repayment term has elapsed. If you’re on a 10-year term, for instance, you can apply for cosigner release after you’ve made payments for five years. 

• Rates (APR): 6.99% – 13.99%
• Loan amounts: $5,000 – $150,000 ($300,000 for graduate degrees, $500,000 for medical, dental, pharmacy, or veterinary doctorate degrees)
• Repayment terms: 5 – 20 years
• Cosigner release: Available after half the original payment term

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ELFI

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Editorial rating: 4.8 out of 5

• Best personalized support
• You’ll be assigned a Student Loan Advisor
• No application, origination, or prepayment fees

Education Loan Finance (ELFI) is an established lending platform that offers a personalized touch throughout the application process. It assigns you a student loan advisor who can assist you through the process and answer any questions you may have. 

ELFI doesn’t charge application, origination, or prepayment fees, and it offers loan terms as long as 20 years. It also gives you the opportunity to prequalify for student loan refinancing on its website, so you can check your rates with no impact on your credit. 

Unlike the other lenders on this list, ELFI does not have a cosigner release program. But you can apply to refinance in your own name. If you meet the eligibility requirements, you can assume sole responsibility for your loan. 

• Rates (APR): 5.28% – 8.99%
• Loan amounts: $10,000+
• Repayment terms: 5, 7, 10, 15, or 20 years
• Cosigner release: Not available, but you can refinance again to remove the cosigner

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SoFi

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Editorial rating: 4.9 out of 5

• Best online lender
• SoFi members gain access to career coaching, financial advice, and more
• Check your rate without affecting your credit

SoFi is an easy-to-use online lender that allows you to refinance student loans with a cosigner. The cosigner release option is shorter than most, available after two years of on-time payments. 

SoFi offers loan terms from five to 20 years and doesn’t charge any application, origination, prepayment, or late fees. It also lets you prequalify online, so you can check out your potential loan offers. It offers the most competitive rates on this list, with APRs starting at just 3.99%. 

This online lender stands out for its various member benefits, which include unemployment protection, financial planning, and member events. 

• Loan amounts: $5,000+
• Repayment terms: 5, 7, 10, 15, or 20 years
• Cosigner release: Available after 24 months of full principal-and-interest payments

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Laurel Road

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Editorial rating: 4.2 out of 5

• Extra rate discounts if you open a Laurel Road Linked Checking account
• No application or origination fees
• Check your rate without affecting your credit

Laurel Road offers competitive refinancing terms for student loans with no maximum loan amount. This can be beneficial for borrowers in professions that required extensive schooling, such as doctors and lawyers. 

You can apply for cosigner release after 36 months of on-time payments with Laurel Road. This lender doesn’t charge application or origination fees, and like the other lenders on this list, it offers online loan prequalification. 

Borrowers who open a Laurel Road Linked Checking account can also qualify for a discount on their interest rate, which starts at just 5.24% with a maximum of 10.99%. 

• Rates (APR): 5.24% – 10.74%
• Loan amounts: $5,000+
• Repayment terms: 5, 7, 10, 15, or 20 years
• Cosigner release: Available after 36 on-time payments

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What to do before you refinance student loans with a cosigner

Once you decide refinancing your student loan with a cosigner is the right decision, you’re ready to take the following steps. 

Discuss the risks with a cosigner

It’s essential you both understand what cosigning entails.

Discuss the questions below with your cosigner:

• Do they know the loan will appear on their credit report and contribute to their overall debt balance? Do they understand how cosigning will affect their ability to qualify for future loans?
• Are they comfortable being responsible for the loan balance if you fail to pay?
• Do you and your cosigner have a good relationship and an open line of communication? If you might miss a payment, can you discuss it together and make a plan?
• Is autopay an option? If so, this might help you avoid missed or late payments and give your cosigner additional peace of mind.
• Does your cosigner understand the length of time they are committing to be a cosigner? Some loans will allow the cosigner to be removed after a history of on-time payments and if your credit rating is high enough. Others will not allow a cosigner to be removed.
• Have you explored all your loan options without a cosigner, and are the loan terms with a cosigner sufficiently better that it’s worth the effort?

To answer the final question, use our student loan refinance calculator to figure out how much money you can save.

If your potential cosigner is unsure after this conversation, they could consider being a guarantor instead. Guarantors serve a similar role as cosigners but are only responsible for repayment if the primary borrower is in danger of defaulting on the loan. On the other hand, a cosigner is responsible for the loan from day one. 

Find out what interest rate you qualify for with a cosigner

Determining the best interest rate requires effort, but it could save you thousands.

Here’s how to find the interest rate you qualify for with a cosigner. 

1. Review the interest rates, application requirements, loan terms, and maximum amounts to determine which loan providers are a good fit. 
2. Narrow your list of lenders to three or four loan providers.
3. Fill out an application for each loan provider. The initial application will not affect your credit score as long as the lender treats it as a soft credit pull. (All the lenders mentioned above do a soft pull when you apply.)
4. Invite your cosigner to apply. Most applications have a section on the application for your cosigner’s name and email address. They will get a separate application to complete.
5. Compare interest rates and loan terms from different lenders. One important term is the lender’s requirement for removing the cosigner. This feature could allow the cosigner to be removed from the loan after a history of on-time payments.
6. Talk with your cosigner, and choose the lender with the best terms.