Using a cosigner¹ on a student loan refinance² can feel like a cheat code: find the right person, and you could potentially unlock lower interest rates and better loan terms than you’d qualify for on your own. That could save³ you hundreds if not thousands of dollars over time. 

But while the right matchup can make a huge difference for the borrower, it’s not the right decision for everyone. Here’s how to know when to use cosigner to refinance—plus the steps you’ll need to take to make it happen.

What is a cosigner and why would I want one?

A cosigner is someone who legally agrees to pay your loans on your behalf if you can’t pay your debt for any reason. Cosigners with good credit make a loan less risky for the lender because they can provide extra assurance that the loan will be repaid on time and in full. 

If you have subpar credit—or very little credit history—a cosigner could help you get a better deal on a refinance. That’s because the lender might look at you as a solo borrower and decide you’re just not worth the risk. If they see you backed by a creditworthy adult, on the other hand, they may be more likely to approve you for a refinance loan. They’re also more likely to offer you lower interest rates.

How can I figure out if I already have a cosigner?

If you took out private student loans to pursue your bachelor’s degree, there’s a good chance you already have a cosigner. That’s because private lenders have minimum credit requirements, and young people rarely have enough credit history to meet those thresholds on their own. (Can’t remember? Call your student loan servicer to find out.) 

If you only have federal student loans, however, you probably don’t have a cosigner. That’s because the Department of Education doesn’t have minimum credit score requirements. As a result, federal borrowers don’t need to use cosigners to qualify.

If you have a pre-existing cosigner, you can ask them to cosign again when you refinance, or you can ask someone new.

When does it make sense to refinance with a cosigner

This is a highly individual decision, and no single online chart can make that choice for you. That said, here’s a personal checklist to consider as you’re weighing your options.

Refinancing with a cosigner might make sense for you if: 

• You have little or no credit history.

• You have a pretty high debt-to-income ratio.

• You don’t meet your top-choice lender’s eligibility requirements.

• You recently tried to apply for a refinance loan and got rejected.

• You applied for refinancing and qualified—but you’re not happy with the interest rate you were offered.

• Your biggest reason for refinancing is trying to get a lower interest rate, but your credit score and income haven’t improved since you first took out your loans.

• You have a creditworthy adult in your life—like a parent or guardian—who’s willing to cosign for you.

• You’re confident in your ability to communicate clearly with your cosigner throughout the process.

Refinancing without a cosigner might be better if: 

• You have excellent credit and strong, steady income.

• You don’t have any major debt aside from your student loans.

• You’re in better financial standing now than when you first took out your loans.

• You’ve applied for a refinance already and got offered a reasonable interest rate.

• You don’t have a creditworthy adult you feel comfortable asking to cosign.

• You’re not sure if you can gracefully manage the tension that sometimes comes with cosigner relationships.

Still trying to decide? 

If you want to see how the potential benefits shake out for your specific loans, try using a tool like Payoff Path⁴. Payoff Path is a free, online dashboard you can use to calculate whether refinancing with a cosigner could save you money in the long run. 

What are the requirements for a student loan cosigner?

Most people ask their parents or legal guardians to cosign their student loan debt, but you can ask virtually anyone with a good credit score.

Cosigning a loan is a binding legal agreement, and it can potentially put pressure on a relationship while the loan balance is outstanding. For that reason, it’s important to think carefully about who you’re asking, why you’ve chosen them, and whether you’re comfortable with the potential changes this may have on your relationship.

Anyone over the age of 18 who is a legal resident of the U.S. is eligible. A cosigner should also be someone with: 

• Good to excellent credit. For an Earnest refinance, your cosigner will need a credit score of 650 or higher. But the higher your cosigner’s credit score, the more likely you are to qualify for a lender’s lowest rates.  

• Steady income. Typically, both you and your cosigner will need to be fully employed. The higher your cosigner’s income, the more you’ll stand to gain by piggybacking off their financial history.

• Legal standing in the U.S. Your cosigner will need to currently live in the United States and be a U.S. citizen, a DACA recipient with a 10-year non-conditional permanent resident card, or an asylee.

What happens to your cosigner after you refinance? 

A cosigner is legally liable for any loan their name is on. So, if they cosign your refinanced loan, they’ll be responsible for making sure it gets paid. If you become unable to make your payments for any reason, that can seriously impact your cosigner’s credit report, and in turn, their ability to qualify for a mortgage loan, refinance their own loans, or qualify for credit cards. If you stop making payments, your cosigner may be forced to step in to make payments for you. Aside from seriously impacting their life and finances, this can also put a strain on your relationship.

If you find yourself unable to make payments, contact your cosigner right away. Let them know what the situation is, and come up with a plan. That way you can work together to minimize any negative impacts. 

You may also be able to get in touch with your lender to discuss what your options are to prevent the loan from going into default. Earnest, for example, offers borrowers in good standing the option to request to skip a payment once a year⁵ in the event they’re unable to pay for any reason. 

How can I release my cosigner if they change their mind?

There are a few ways to let your cosigner off the hook if their financial priorities change and they no longer want to be responsible for your loans. Some lenders offer a pathway called “cosigner release.” This tool lets you remove your cosigner from your loans. To qualify for a cosigner release, you’ll typically need to have made a set number of payments on your refinanced loan. You’ll also have to demonstrate that you’re responsible enough to continue handling your payments on your own. 

Refinancing student loans with a cosigner: How does it work?

Use this step-by-step guide to see what refinancing with a cosigner could look like for you. 

Double-check your loan type

It depends on the lender, but if you currently have private student loans, they’ll likely retain many of the same features and benefits even after you refinance. If you have federal loans, though, refinancing will turn those loans private. As a result, you’ll lose access to federal borrower protections. 

That might sound scary at first. But many borrowers—especially folks with steady income and a clear career path—never use those protections. So they are paying a higher interest rate than they need to just to hold on to protections they might never use.

If you’re making a relatively low salary and plan to take advantage of income-driven repayment plans for your federal loans—or if you qualify for Public Service Loan Forgiveness (PSLF)—it’s best to keep your loans in the federal system. That means putting your refinance plans on the back burner. 

Determine whether it’s the right time to refinance your loans

If you’re on stable financial footing, now could be a good time to refinance. That’s especially true if you have private loans and market interest rates have dropped since you first took out those loans. In that case, refinancing could help you qualify for a much lower interest rate than you currently have. If, however, market rates have risen since you originated your loans, it might be better to wait until rates are lower before you refinance. 

Determine whether you need a cosigner

First, check your rates through Earnest’s online rate-checker tool. (This process involves a soft credit check, which won’t affect your credit score.) If you find you can get a better rate with a cosigner, it’s time to find a trusted adult who might be willing to fulfill that role. 

Identify a cosigner and ask them for help

Once you’ve found a trusted adult, ask them if they’d be willing to cosign for you. You should be prepared to explain to your cosigner exactly how you plan to pay off your student debt. You’ll have the best chance for success if you can show that you’re financially responsible, that you’ve considered how serious the agreement is, and that you know how you’ll pay off the balance.

Be prepared to get a no. The person you ask may decline for reasons they may not be willing or able to discuss with you, such as financial obligations or insecurity of other family members, or a bad experience in the past that has nothing to do with you.

What to do if you can’t find a cosigner

If you can’t find someone willing to cosign, consider spending the next year working to build up your credit so you can try to refinance on your own in the future. You may be able to improve your credit score over just a few months by applying for a credit card or credit-builder loan and making all your payments on-time and in full. 

Choose a lender 

Research lenders thoroughly before you start an application. Consider that the company you choose will be with you for a long time, likely 5 to 10 years, and possibly even longer. Be sure to choose one with a stellar reputation as well as low rates.

Also be mindful about choosing a payment you can afford. You never want to put yourself in a position where you expect it will be difficult to make your payments, as going into delinquency or default—when you aren’t able to meet your obligations to your lender—can have a serious impact on your credit score.

Submit your loan application

Once your cosigner is on board, ask them if you can put their contact information on your refinance application. They’ll get an email asking them to fill out their half of the form. When that’s done, Earnest will perform a hard credit check. Then, Earnest will make an official interest rate offer, which you can either accept or decline.

Make your first payment—and then keep making them

Making on-time payments is extra important when those payments could affect someone else’s financial situation, too. You may find it helpful to sign up for automatic payments to make sure you never miss one. Some private student loan lenders offer borrowers interest rate discounts in exchange for signing up for autopay⁷ (Earnest, for example, offers a 0.25% autopay discount just for enrolling). So, this can help you save money over time, too.

How to apply to refinance with a cosigner at Earnest 

At Earnest, you can apply to refinance any loan for which you’re the primary borrower. When you do, you’ll get to decide whether you want to refinance on your own or with a cosigner. The application process, loan features, and benefits are exactly the same no matter which option you choose. 

Here’s how it works: 

• Start with a rate check. You’ll see your potential interest rate and start the application. 

• Select ‘Apply with a cosigner’ to start your part of the application. 

• After you enter your contact info and student loan details, you’ll be able to invite your cosigner, and they can complete their part of the application. 

• Once you submit the application, both you and the cosigner will go through a hard credit pull. 

• You’ll receive an email with your final rate offer.

• You can then select your loan terms, rates, and payment.  

Can I refinance student loans that already have a cosigner?

Yes. You can refinance a previously cosigned loan, as long as you meet your lender’s eligibility requirements. 

You can also refinance a loan that you’ve already refinanced. Earnest allows borrowers in good standing to apply for an additional refinance after just 30 days. You can either choose to release the pre-existing cosigner from their obligation, or ask them to cosign a second time.

Can I refinance my student loans without a cosigner?

If you can’t find a creditworthy adult to cosign for you, you may be able to refinance your loans without a cosigner. Your eligibility for such a refinance depends largely on your credit. Some lenders—like Earnest—consider other factors, like your current employment and work history, which may make it easier for you to get approved without a cosigner.

You may try applying for a smaller loan amount. Generally speaking, the more money you want to borrow, the harder it is to get approved. You may be able to save money in the long term by refinancing your loans slowly, a bit at a time, while you improve your credit score along the way.

Find out how much you could save with Earnest

Refinancing with a cosigner can help you secure a lower interest rate and/or a lower monthly payment—both of which could make your loans more affordable. You can also use refinancing to switch between a fixed and variable interest rate, shorten your loan term, and even get out of debt faster.

And with Earnest, you can refinance again after just 30 days. That means there’s a good chance you’ll be able to release your cosigner sooner than expected.

Want to see if refinancing with a cosigner makes sense for you? Use our rate checker tool to see what kinds of rates you could qualify for, both with and without a cosigner. It’s fast, it’s totally free, and it won’t affect your credit score.

Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.

1 Adding a cosigner does not guarantee approval or a lower rate. Loan terms depend on you and your cosigner’s credit profile and other factors. Cosigner impact varies; approval and rates not guaranteed.

2 Please note that you will lose benefits associated with your underlying federal loans, such as federal Income-driven Repayment Plans, Economic Hardship Deferment, Public Service Loan Forgiveness, or other deferment and forbearance options, if you refinance into a private loan. If you file for bankruptcy, you may still be required to pay back this loan.

3 Choosing to refinance to a longer term may lower your monthly payment, but increase the amount of interest you may pay. Choosing to refinance to a shorter term may increase your monthly payment, but lower the amount of interest you may pay. Review your loan documentation for the total cost of your refinanced loan.

4 Payoff Path is offered by Earnest, and earning or applying benefits (if any) depends on eligibility, your financial profile, and applicable policies. Terms and conditions apply; see Earnest’s Terms of Use and Privacy Policy for full details. Offers, features, and availability are subject to change without notice.

5 Earnest clients may skip a payment through a one, one-month forbearance during a 12 month period. Your first request to skip a payment can be made once you’ve made at least 6 months of consecutive on-time full principal and interest payments, and your loan is in good standing. The interest accrued during the skipped month will result in an increase in your remaining minimum payment. The final payoff date on your loan will be extended by the length of the skipped payment periods. Any unpaid accrued interest may capitalize (added to the principal balance) at the end of the forbearance period by adding unpaid accrued interest to the outstanding principal as permitted by law and the terms of the loan agreement.

Interest will not be capitalized on loans originated to Michigan residents under the Regulatory Loan Act of 1963. Please be aware that a skipped payment does count toward the forbearance limits. Please note that skipping a payment is not guaranteed and is at Earnest's discretion. Your monthly payment and total loan cost may increase as a result of postponing your payment and extending your term.

6 You may be able to refinance your Earnest Student Loan Refinance again. To be eligible, the loan must have been disbursed more than 30 days ago, it must not be past due, and you must not be enrolled in a hardship or bankruptcy forbearance, skip a pay or any interest only repayment program. Keep in mind that a hard credit check will be required each time you refinance, which may impact your credit. Please review our Eligibility Guide & Requirements for further details.

7 You can take advantage of the Auto Pay interest rate reduction by setting up and maintaining active and automatic ACH withdrawal of your loan payment from a checking or savings account. The interest rate reduction for Auto Pay will be available only while your loan is enrolled in Auto Pay. Interest rate incentives for utilizing Auto Pay may not be combined with certain private student loan repayment programs that also offer an interest rate reduction. For multi-party loans, only one party may enroll in Auto Pay.