The way a co-signer can eliminate their name from student education loans

Have you ever agreed to be a co-signer on a friend’s education loan but regretted having done so after the fact? Let’s say you do not talk to the person anymore, and fear risking a damaged credit rating if they default on the loan. If this is the case, it’s high time you took steps to protect yourself. There are ways to have your name removed from those student loan documents and improve your credit score in the process.

Don't lose too much as a student loan co-signer

You should know that co-signing a student loan makes you partly responsible. The loan or debt is being guaranteed by you. The student sometimes will not pay back the loan. This makes it your responsibility to pay. Thus, it is wise to make sure that you’ll be able to make the payments, in the worst case scenario. If not, collectors will come to call and your credit rating will suffer severe damage, which in turn will make it much more difficult for you to obtain other forms of credit.

When co-signing an educational loan, a creditor will give you a list of obligations. This can be explained to you. Get copies of the Truth in Lending Disclosure agreement and loan contract. Keep these around.

Get the student loan released

Start by pursuing a standard student loan co-signer release. If the student is making payments well enough on his or her own, the private education loan will sometimes allow the co-signer to get off the contract. The student must also meet the lender’s credit standards and other requirements. Thus, the hope is the estranged student has kept their credit history tidy.

If the lender will not allow you to obtain a co-signer release, then the student can have to refinance the loan. Refinancing enables the student to obtain an entirely new loan at a lower rate of interest, and this loan pays off the original education loan. Any lender can be used to do this, whether or not it is the same. The student has to have great credit to do this though.

Students might not want you to leave

Students are impacted when the co-signer disappears. It will make the student more at risk. If they’re suddenly unable to repay their student loans and don’t have a co-signer as a fallback, the lender can take them to collections. In the case of government loans, even tax return money is not safe.

Information from

Bankrate

bankrate.com/finance/college-finance/is-there-a-way-out-for-student-co-signer.aspx

ehow

ehow.com/how_2002636_remove-loan-cosigner.html

Whalehook Loans

whalehookloans.com/2007/09/26/what-are-the-benefits-of-obtaining-or-removing-a-cosigner-from-a-student-loan/

No co-signer? No credit history? No problem.

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