Education » Articles » What it Means When You Cosign for Your Student
Student Benefits of
Having a Cosigner
- A great way to start building credit history
- Student starts learning financial responsibility
- No need to have a cosigner in the future on auto & home loans
- Student receives lower interest rates
What it Means When You Cosign for Your Student
College-age students typically need cosigners for loans as they do not have enough financial information or credit history available to have loans
approved. Plus, with recent changes to credit card regulations, people need a cosigner for a credit card if they are under age 21 or do not make
$2,000 or more annually.
The Benefits of Cosigning—If you cosign on a private student loan, your student will likely receive a better
interest rate since you have more credit history available than they do. This will save your student more money in the long run. It is also beneficial
for students to start building credit responsibly with reasonable-limit credit cards. We encourage students to use their credit cards for small necessities
they have previously budgeted for or for emergencies. Having good credit history can help them down the road with larger loans, such as vehicle and home
purchases, without the need for a cosigner.
What You are Responsible For—If you cosign, you bear as much responsibility for the loan as the original signer.
This means that if your student doesn't make their payments, you will need to make them as you are equally responsible for repaying the loan. If payments
are missed, your credit score is also affected. Before you cosign, you want to make sure that you read any disclosures carefully. Whether it is a private
student loan or a credit card, you are notified, as well as your student, when payments are missed, receiving duplicates of all communications sent to
the student. Ultimately, you will want to ensure that your student is aware of his/her responsibilities when cosigned accounts are opened.
We're Here to Help—Our mission is to provide our college-age members with the building blocks to begin a life of
financial responsibility. Our services come with online account management, so your student can view balances and pay accounts online. Students can also
use Money Management Tools in Web Branch to see how they are spending their money. In addition they can sign up to
receive Email & Text Alerts—text or email message
reminders to help them manage accounts, and we have Mobile Banking at m.uwcu.org. Plus, we offer free financial seminars geared toward students, in addition
to our bi-monthly newsletter, Limelight, which includes account management tips. Students can always contact us by stopping by a branch, calling us at
800.533.6773 or sending a secure email message through Web Branch whenever they have questions.
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