How to Find a Cosigner

Securing a loan without a steady source of income and a strong credit score is tough. For many students in the U.S., federal loans can cover their tuition or any gaps in their funding, but sadly, this is not an option for international students studying in the U.S.

The good news is that international students can still qualify for a personal loan with the help of a cosigner. But what exactly is a cosigner and how do you find one to help you land a much-needed loan?

What is a Cosigner?

A cosigner is an individual who applies for a loan along with you and acts as an additional source of repayment. This way, the cosigner can help you get a loan at better rates that would otherwise have been impossible to secure.

Essentially, a cosigner acts as a guarantor and makes the deal look like a safe bet to the lender, because now two people are responsible for repaying the loan.

How to Find a Student Loan Cosigner?

The best way to find a student loan cosigner is to approach your friends and family who are willing to help you out. Parents are the most common cosigners, so start with them.

You can also look to your aunts, uncles, grandparents, and close personal friends for help. However, there are a few conditions that an ideal cosigner must meet:

Age

A cosigner must generally be above the legal age limit per the guidelines of your state of residence, typically 18, 19, or 21.

Good Credit

It is easier to qualify for a loan when your cosigner has a good credit score. In many cases, your lender might even require that the cosigner has worked with their current employer for several years to ensure the income stability.

Your lender might also ask your cosigner about how long they have been living at their current address.

Further, if you are an international student, your cosigner should be a U.S. citizen or permanent resident.

4 Tips to Help Get a Cosigner for Your Loan

1. Be Prepared

Undoubtedly, cosigning for someone comes with its own set of risks and responsibilities. Thus, you should begin the conversation by giving the person all the required details and help them make a well-informed decision.

2. Be Honest

As a cosigner, they need to know about your finances so that they can weigh the risks involved and make an informed decision. For this reason, you should provide a clear picture of your financial situation to them. Ideally, you should share your job and income details with them.

3. Understand the Details

It is vital to understand the entire loan process inside-out, including all the minor and major details like monthly payments, interest costs, and so on. You should also ask your lender if you will be able to release the cosigner after a certain number of on-time payments or other stipulations.

4. Discuss the Risks

We highly recommend that you discuss all the possible risks with your cosigner. They might not know about all of the ways cosigning could negatively impact them, and keeping them in the dark could prove to be problematic in the future.

What Risks Does a Cosigner Take?

With all of the potential risks involved with cosigning, it takes a great deal of courage and generosity to take on the responsibility. Whether you are looking for a cosigner or cosigning for somebody, it is important to know everything that’s at stake.

Having to Possibly Pay Back the Loan

If the primary borrower fails to pay back the loan, the cosigner is the next responsible person. While you might have the best intentions for repaying your loan, things don’t always work out as planned. You might fall terribly ill, or lose your job, which would make the cosigner directly responsible for paying off the loan.

Having More Limited Borrowing Ability

You might not see this coming, but cosigning for someone limits your borrowing ability. Even when a cosigner is not directly responsible for paying off the loan, their credit score is affected. Thus, if a cosigner plans to borrow money in the near future, lenders will be able to see that the cosigner could potentially need to pay off an extra loan, and this could make all the difference.

Taking Possible Damage to Their Credit

As expected, if a cosigner fails to repay the loan for any reason whatsoever, this would affect their credit score. Their missed payments will be reported to the credit bureaus and their strong score might deteriorate.

What If You Can’t Find a Cosigner?

Keeping all the risks mentioned above in mind, finding a cosigner is actually tougher than it seems. However, the good news is that there are various personal loan lenders who don’t require you to have a cosigner.

If you are an immigrant, new to the U.S., and do not have a strong credit score, you can still get a personal loan with Stilt. Stilt is an online lender that works with underserved communities.

All you need to do is submit a complete application online.

After your application has been received and verified, Stilt will send a promissory note for you to sign, after which, the money will be transferred to your account within 2-3 business days.

The best part is that Stilt doesn’t require you to have a cosigner.

Conclusion

While Stilt is the best option for securing a loan even if you don’t have a cosigner, if you still need to find a cosigner, it is highly recommended to play it safe. There are people out there who promise to cosign for some money and then turn out to be con artists. Thus, you should try to avoid sharing your bank account number and other important details with someone you are not sure of and make it a point to only approach reliable people.

Have a question? Write to us in the comments below.

Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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