Refinancing Student Debt With a Cosigner

By Kayla McCormack · April 07, 2022 · 7 minute read

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Refinancing Student Debt With a Cosigner

If you’re interested in refinancing your student loans but don’t think your credit history is strong enough, you don’t have to give up. There are options available that could make refinancing a reality for you. One option is taking out the loan with a cosigner.

A cosigner could potentially help you qualify for a refinanced loan with a new lower interest rate. But is taking out a new loan with a cosigner the right option for you? Here are some key ins and outs of borrowing a loan with a cosigner so you can decide what works best for your personal situation.

What Is a Cosigner on a Loan?

A cosigner is someone who legally agrees to pay your debt in the event that you can’t make payments yourself. The exact terms will vary based on the loan type and lender, but in general, this person signs your loan with you and accepts responsibility for your loan if you don’t make payments.

A cosigner can potentially be used for several different types of loans, from taking out a mortgage to borrowing for a car.

Can a Cosigner Refinance a Student Loan

If you’ve had private student loans, you might have needed a cosigner to qualify if your credit history was too new or not robust enough to qualify on your own.

Creditors review a variety of factors to determine whether or not they will give someone a loan. Things like a lot of existing debt, or a low credit score can sometimes serve as an indicator to lenders that an individual could be a credit risk. Adding a cosigner could make a potential borrower appear less risky, since there’s another person (ideally with a strong financial background) to help guarantee repayment of the loan.

Recommended: Applying for a Student Loan Without a Cosigner

Finding a Cosigner

If you can’t qualify for a loan based on your own credit history or current income, sometimes refinancing with a cosigner who has a strong credit history could help improve your prospects.

You could ask a friend or relative to be a cosigner. Being a cosigner can be a hefty responsibility, so treat the request with respect, and perhaps plan to be open and honest about why you need a cosigner.

Pros and Cons of Having a Cosigner

Taking out a loan with a cosigner is a significant commitment, so it’s worth considering some pros and cons. What’s right for you will depend on your personal and financial situation.

One of the most notable benefits of taking out a loan with a cosigner is the potential to qualify for a loan that may not have been an option otherwise. A cosigner could also possibly help you qualify for a lower interest rate than you otherwise may have received. If you have little to no credit history or bad credit, taking out a loan with a cosigner could give you an opportunity to begin working towards improving your credit.

On the flip side, there can be some cons to taking out a loan with a cosigner too. If you fail to make payments on your loan, your cosigner will be responsible for repaying your debt. As a result, missed payments will likely reflect on both of your credit histories. This could also negatively impact your personal relationship with your cosigner.

Using a Cosigner when Refinancing Your Student Loans

If you’re currently in the process of repaying your student loans, refinancing could be an option that could lower your interest rate.

Enlisting a friend or family member to cosign your refinanced loan, could help strengthen the application and help you get ahead of your debt and begin to build you a brighter financial future.

If you’re trying to find a cosigner, you can start with the people you trust the most. Acting as a cosigner has its own risks — if you don’t pay back your loans, your cosigner is on the hook. It’s a big request, so take some time to think about how you’ll make it. Here are some tips that may help inform your conversation:

1.    Asking respectfully. If you’re asking someone to be a cosigner, you will likely want to broach the subject thoughtfully and respectfully. You’re asking for a serious commitment, so asking with tact to show you understand the gravity of your request is crucial.

2.    Showing your dedication. It’s also important to make it clear to your cosigner that you’re going to be making timely payments on the loan. One simple way to do so is by providing regular updates.

3.    Illustrating to your cosigner that you understand the intricacies of your loan. They’ll be responsible for the loan if you fail to make payments, so they’ll likely want to make sure you understand the responsibility you’re taking on — and asking them to take on.

Things to Consider if You’re Asked to Cosign a Loan

Serving as a cosigner can come with consequences for your own finances if the primary borrower fails to make payments. If you’re a family member or friend with excellent credit and a well-paying job, you could be a candidate for cosigning (or at least be asked to). If you have some hesitation, here are a few thoughts to consider:

1.    Talking it out with the borrower. They are going to use your name and credit history to take out a loan. It can be helpful to understand why they feel they need a cosigner while making sure they have the means to repay the loan.

2.    Following up often. Keeping the lines of communication open so you are aware of any issues can be helpful for both parties. If need be, you could discuss making payments on their behalf to avoid the effect of a late or missed payment on your own credit score.

3.    Accepting negative outcomes. Even if you’ve done everything you can to ensure the borrower is trustworthy, something might come up where they let you down. Your credit score might take a hit and you might be responsible for making payments yourself. Remember that this could happen, so accepting it as a possibility may be helpful.

Cosigning a loan is a big responsibility that can have implications on your financial future so, as with other major decisions, take a moment to consider if there’s anything you’re not comfortable with.

You can let the requester down gently by trying to help them think of some alternative options for them to secure the loan or money they need. If you have the chance to help someone take out a loan or qualify for a lower interest rate, give it careful consideration.

Refinancing Student Loans With SoFi

If you’re interested in refinancing a loan consider SoFi. The application process is entirely online, and it’s easy to add a cosigner to the application should you wish to apply for a refinanced loan with one. SoFi also offers cosigner release, which is an opportunity for the cosigner to be removed from the loan. It’s important to note that if you are refinancing federal student loans, they’ll lose any eligibility for federal programs or borrower protections.

Thinking about refinancing student loans? Learn more about applying with or without a cosigner.


Do I need a cosigner for student loan refinance?

The specific requirements for refinancing a loan with a cosigner will depend on both your credit history and income (among other factors) and the eligibility requirements of the lender. Borrowers who have a less than stellar credit history may find adding a cosigner to their application allows them to qualify for a more competitive interest rate.

Can I consolidate my student loans with a cosigner?

If you are consolidating federal loans through the Direct Consolidation Loan program, you don’t need a cosigner. If you are interested in refinancing, it is possible to refinance student loans with a cosigner, so long as it is permitted by the lender.

Can a cosigner become primary borrower?

In order for the cosigner to become a primary borrower, the loan would generally need to be refinanced.

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SoFi Student Loan Refinance
If you are looking to refinance federal student loans, please be aware that the White House has announced up to $20,000 of student loan forgiveness for Pell Grant recipients and $10,000 for qualifying borrowers whose student loans are federally held. Additionally, the federal student loan payment pause and interest holiday has been extended beyond December 31, 2022. Please carefully consider these changes before refinancing federally held loans with SoFi, since the amount or portion of your federal student debt that you refinance will no longer qualify for the federal loan payment suspension, interest waiver, or any other current or future benefits applicable to federal loans. If you qualify for federal student loan forgiveness and still wish to refinance, leave unrefinanced the amount you expect to be forgiven to receive your federal benefit.

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Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income-Driven Repayment plans, including Income-Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.

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