5 Tips On Asking Someone To Cosign On Your Loan
June 6th, 2014 by Jennifer Frankel
If you are a student studying overseas, then you will most likely be paying more for your education than most students. While it’s worth the experience, you may find that the expenses add up to more than what you have available. In cases like this, you may want to consider an international student loan or study abroad loan.
If you are an international student who just arrived in the US, then chances are you don’t have any credit. If you are a US student, it’s likely that you may not have a good enough credit score, or you may not have an established credit history that can make it difficult to apply for a student loan.
For all international students and most US students, you will need to have someone cosign your student loan. Essentially, this person is acting as the guarantor in case you are unable to pay back your student loan. For most people, a cosigner is typically a family member. Asking someone to sign the dotted line with you may leave knots in your stomach, but after reading these 5 tips on asking someone to cosign on your loan, you will be one step closer to the money you need.
Our top 5 tips
1. Have A Plan
- Don’t ask for a loan that is beyond your means. If you can’t cover the monthly payment, the amount is obviously too much. Only borrow the amount you need. Your cosigner should be confident in your ability to make the payment each month because if you don’t pay, your loan and your debt becomes their problem. See our recent blog post to learn how much you should borrow.
- Have physical evidence that proves to your cosigner that you make enough money each month to adequately cover the payments. A document from the bank showing how much money you currently have in your account(s) or a current pay stub should suffice.
2. Remember What You’re Asking
- If you can’t pay and for whatever reason, your cosigner can’t pay either, the cosigner is potentially in danger of being sued, problems with his or her personal credit and loss of personal items of value to cover the loan, etc.
- This is a large responsibility to take on, so make sure not only that you’re asking the right person (someone who is not financially struggling themselves), but the potential gravity of the situation, should things take a turn for the worse.
3. Ensure The Value of Your Debt
- While you may not have the funds right now to pay back your loan, you may once you get your first job out of college. Look at the potential income you’ll receive given your degree and analyze the loan amount you are looking to take out. You will want to make sure that you are able to keep up with the monthly payments, and that you’ll be able to pay off the loan within a reasonable time.
4. Practice The Conversation
- While an outline may seem too collegiate, it’s actually a good strategy for planning out the main points of the conversation. Even if you’re 100% sure he or she will cosign, they will be far more likely to give you a definitive yes if he or she is able to see how well you’ve prepped yourself on the matter.
5. Go To The Bank Together
- When your cosigner has given you the go-ahead, you will need to get their contact information as they will need to complete the necessary paperwork online as well. Be sure to get the name, date of birth, social security number, address, phone number, and email address. You can always contact the lender before anyone signs anything, go over the fine print as many times as it takes and be sure to ask lots of questions.
- When the questions have been asked and everyone is satisfied with their answers, proceed with the signing of the loan, but if and only if, all parties agree with the stipulations and fine print of the loan agreement.