Best lenders to refinance student loans with a cosigner
Key takeaways
- If you are struggling to make student loan payments, refinancing can help make your payments more manageable.
- If you don’t qualify for refinancing on your own, adding a cosigner may help you be approved.
- Consider multiple lender options when you search for a student loan refinance with a cosigner.
- Not all lenders allow cosigners, so check the lender requirements if you choose to use a cosigner.
About 43 million people in the United States have student loan debt. While many believe you are stuck with the initial loan terms, you can refinance your student loans. According to a survey from the Consumer Financial Protection Bureau, 63 percent of student loan borrowers have struggled to make payments. Refinancing can help make payments more manageable, but not everyone will be able to qualify on their own.
If you have poor credit, ask a close friend or family member to be your cosigner. They will take responsibility if you miss a payment and might help you secure a better rate. There are several lenders that allow cosigners, so carefully compare options, risks and costs before refinancing your student loans.
4 lenders that refinance student loans with a cosigner
Many student loan companies are out there, but not all of them will let you refinance with a cosigner. Here are some of the best lenders that let you add someone to your loan.
|
Loan amounts |
APR |
Minimum credit score |
|
|
SoFi |
Starting at $5,000 |
4.49%-9.99% Fixed *with autopay and direct deposit discount |
640 |
|
College Ave |
$5,000–$300,000 |
6.99%-13.99% Variable; 6.99%-13.99% Fixed |
Not Specified |
|
LendKey |
Starting at $5,000 to 100% cost of attendance |
4.89%-9.04% Fixed |
Not Specified |
|
Laurel Road |
Starting at $5,000 |
5.29%-9.20% Variable; 4.99%-8.90% Fixed |
Not Specified |
SoFi
Bankrate's view
SoFi is an online lender that started with student loans but now offers various financial products. SoFi is known for its member benefits, including rate discounts and career services. It also charges zero fees, not even if a payment comes in late.
SoFi borrowers may add a cosigner to their refinance loan by logging into their SoFi account and adding the cosigner’s name and email address. SoFi will send the cosigner an invitation and continue the application from there. Note that adding a cosigner adds a week or two to the refinancing process. SoFi does allow a cosigner to be released after 24 months of full principal and interest payments, pending approval by underwriters.
Pros
- Rate discounts available
- Low loan amounts available
- No fees
Cons
- Longer application process with cosigner
- Must have graduated to refinance
- High interest rate for parent loan refinances
College Ave
Bankrate's view
College Ave is an online lender focused exclusively on student lending and refinancing. The site has a streamlined application and also offers plenty of resources and educational content to learn more about student lending and how loans work. The lender also boasts eleven different loan terms for its refinancing product, making it easy to customize your loan and monthly payment to fit your budget.
However, the lender is opaque about its eligibility requirements, meaning you’ll need to enter your information to see if you and your cosigner are eligible for a loan. There is also a refinancing limit of $500,000 for medical, dental, pharmacy or veterinary degrees, $300,000 for other graduate or professional degrees, and a limit of $150,000 for all other degrees.
Pros
- Variety of loan terms available
- Quick and convenient application process
- Competitive rates for parent refinance loans
Cons
- No grace period for parent loans
- No income-driven repayment plans
- Not transparent about eligibility requirements
LendKey
Bankrate's view
LendKey is an online lending platform that matches borrowers with a variety of partner lenders. This makes it an appealing solution for borrowers who want to get multiple quotes to find the best deal, since their application will be compared against several lenders’ requirements. The loans offered through LendKey come with terms ranging from five to 20 years and no origination fees.
One major drawback is that because LendKey does not originate its loans, many details about your loan depend on which lender you’re ultimately matched with. LendKey’s advertised rates and terms represent all of its partners, so you may find yourself matched with a lender with several fees or insufficient repayment terms.
Pros
- No fees
- Simple lender comparison process
- Variety of loan terms available
Cons
- Terms vary by lender
- High credit score requirement
- Requires a steady income to qualify
Laurel Road
Bankrate's view
Laurel Road‘s refinancing loans offer students a wide choice of loan terms and extremely low interest rates. In addition to the standard autopay discount, you can get an interest rate discount by signing up for a checking account with the company. Laurel Road also allows students to refinance loans as early as their final semester of school.
While Laurel Road refinances most types of loans, it should be noted that many types of associate degrees are ineligible. Borrowers with an associate degree must have earned that degree in a healthcare-related field to qualify for refinancing.
Pros
- Competitive rates
- Rate discounts available
- Available to current students with an employment offer
Cons
- Only refinances healthcare-related associate degrees
- Strict requirements for loan forbearance if you return to school
- Some discounts and rewards require a Laurel Road savings account
Why would you refinance a student loan with a cosigner?
Refinancing a student loan, or any loan, with a cosigner has a few benefits.
When someone cosigns a student loan, they agree to make payments on the loan if you stop or cannot keep paying. When someone cosigns a loan, the lender will look at their credit history and financial situation in addition to yours when making a lending decision.
If you find a willing cosigner who has strong credit, that can make it much easier to qualify for a loan. Lenders will be more willing to approve the application since they will see that someone with good credit is willing to be on the loan. A strong cosigner can also mean a lower interest rate, which means a lower monthly payment and less interest accruing over the life of the loan.
Can a cosigner be removed from a student loan?
Removing a cosigner from a student loan is possible if you meet the requirements. Refinancing a loan is one of the easiest ways to remove a cosigner from a loan because, in effect, you’re replacing the existing loan with a brand-new one. In this case, you’ll need sufficient income and a good credit score to qualify for a new loan on your own.
Many student loan lenders also offer the option to request a cosigner release. Typically, you need to have improved your credit since you initially received the loan and have made a minimum number of timely payments. Most lenders will allow you to request a release after one or two years of on-time payments.
Remember that not every student loan lender allows cosigners to be removed from loans without refinancing. If this interests you in the future, keep it in mind while shopping around for loans.
Bottom line
Refinancing your student loans is one option for getting better terms and interest rates, potentially saving you money. Having a cosigner can help you refinance if your credit score is poor, and several lenders allow cosigners. You can later remove the cosigner if needed and you meet the required qualifications.
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