When delving into the world of private student loans, you may discover that many lenders mention a “co-applicant” or “co-borrower.” A co-borrower is someone who applies for the loan with you and is equally responsible for ensuring it is repaid. The student loan will be held in your name as the primary borrower, but the co-borrower’s name and credit will be tied to the loan as well.
Why do you need a co-borrower?
Most high school and college-aged students have not yet built a good credit history, meaning lending to them is a bigger risk for financial institutions. A lender can’t look at your credit and payment history to be assured you will repay the loan. By applying with a co-borrower, you may have a better chance of being approved for a loan, and you may receive a lower interest rate.
Characteristics of a good co-borrower
First and foremost, a co-borrower needs to have established – and good – credit. They also will need proof of a stable income, and a low amount of debt. Specific criteria, including credit union membership requirements, vary by lender.
Your co-borrower needs to be aware that they are as legally responsible for making payments toward your student loan as you are. As the name indicates, they are borrowing the funds alongside you and sharing the same debt. Just as a couple shares a mortgage for their home, your co-borrower will hold the student loan with you.
Who can be a co-borrower on a student loan?
Parents are the most common co-borrowers on a student loan, but there may be reasons a parent isn’t the best (or available) choice. They may not be involved in a student’s life, or they may not have a strong enough credit history. Essentially anyone can be a co-borrower – a grandparent, another family member, or even a mentor or family friend, so long as they meet the criteria above.
If you are looking for a private student loan to help cover costs once you’ve exhausted options for scholarships, grants, and federal student loans, Student Choice can help! Learn more about our private education line of credit to make sure your costs are covered. Find a credit union and apply easily online. (Keep in mind, 97% of our approved applications have a co-borrower!)
If you have additional questions about paying for college, consult our College Counselor, who provides free, personalized guidance on paying for college and navigating your options.
*This post was updated in January 2025.
