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Welcome to Knowledge for College brought to you by Chase, and thanks for joining us. This series of videos provides valuable information on the many important steps of going to college and financing an education.

Hi, I’m Chelsea Richardson.

Let’s look at the possible benefits of including a cosigner on a student loan. Here’s Ken Butler with details.

So it’s time to apply for a student loan that requires a credit check. But, you don’t have an established credit history. Maybe you don’t have your own credit card or any other loans. Or maybe you do have a credit score, but it isn’t the greatest. Any of these factors could make it hard to qualify for a student loan on your own. 

A cosigner can help. A cosigner is usually a family member or friend with a solid credit history who's willing to help you qualify for the loan. Your cosigner also will be responsible for the balance of your loan if you're unable to make the payments. Each lender's loan may have different cosigner requirements, so make sure you read that information carefully.

Having a cosigner offers real benefits—and responsibility. If you have good credit, a cosigner may help you get a lower interest rate. When it comes time to repay your loan, you must make your payments on time. If you don’t, it will damage your credit and your cosigner’s credit. The lender may seek payments plus fees from your cosigner. A damaged credit rating can make it harder for both of you to get other loans, credit cards, a car, a home – the list goes on.

But by making your credit payments on time, you can help build a solid credit history. And that’s a good step to establishing a healthy financial future. To learn more about cosigners, visit Consumer.gov and search for cosigner.

The Knowledge for College informational video series is brought to you by Chase to help you better understand college financing and other important topics regarding higher education. If you have any questions about your specific situation, you should consult your own financial advisor or the financial aid office of your school.

This information was current as of 09/01/2008.

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