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Cosigning a Student Loan

Video Transcript

I am Ray Jones with South Carolina Student Loan. I'm the Vice President of Loan Programs here, and I'm here to explain a few things about cosigning a student loan. Oftentimes in student loans, you take your first loan out as your graduating high school and your credit score may not be sufficient enough to borrow on your own.

So many times doing private education loan borrowing, we have family members, like mom and dad, that help support that student so that one, they can get approved for the loan, and two, have the lowest rate possible by choosing to cosign, being willing to pay that loan back should something happen that the borrower's not able to. 

Cosigners aren't necessarily required. We're gonna look at the FICO score—the credit score—of the student or the borrower, and make a determination on that. I will say that a large portion of our borrowers are cosigned loans simply because a 17 or 18-year-old kid borrowing for the first time may not have established credit, and that's fine.

We can do a loan year by year so that you may need a cosigner for your freshman year. As you gain some credit standards and credit history, you may not have to utilize a cosigner as you finish up your college career.

We want the cosigner to be part of not only the online application, making sure that we're getting the best rates possible based on those credit scores, but also understanding what the terms of those loans are as you are selecting those terms.

When you apply, it means something to the cosigner as well. Obviously, we want to make sure that they're knowledgeable about the loan that the student's applying for. So it's a very simple process.

And typically speaking, the cosigner and the borrower do that together as they're applying.

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