Essay on The Risks For A Student Loan

1063 Words Jul 7th, 2015 null Page
Millions of college students and graduates have student loans, and millions of those include cosigners. Though having a cosigner makes abundant sense so that you can qualify for a student loan, you should be purposeful about getting your cosigner released from the loans.

There are complications involved with a cosigner on a student loan, and they can negatively affect both the student/primary borrower and the cosigner. The only solution is to get the cosigner released as soon as possible.

The risks for cosigners for staying on a student loan

The vast majority of student loans involve cosigners, which is usually a parent or grandparent. The existence of a cosigner on a loan typically results in a lower interest rate, since it reduces the risk of loan default to the lender.

However, since student loans usually extend over many years, it is highly desirable – from the cosigner’s point of view – to be released from the loan. While the cosigning may have been entirely necessary in order for the primary borrower, as a student, to qualify for the loan, once a student graduates, he or she should have the financial strength to carry the loan by themselves.

As well, the longer that the loan is in existence, the higher the likelihood is that it will incur either late payments or even an eventual default. Should that happen, the cosigners credit will be negatively affected. No cosigner will want derogatory credit information springing from a loan that they cosigned for many years…

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