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Author Topic: Co-signer lowers private loan interest rates?  (Read 640 times)

Poetgrl21

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Co-signer lowers private loan interest rates?
« on: June 29, 2006, 10:59:35 AM »
Is this true?  And how much? Can the co-signer be living with you?

StepUpT0theMike

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Re: Co-signer lowers private loan interest rates?
« Reply #1 on: June 29, 2006, 12:50:39 PM »
How much depends on the difference between your credit score and the credit score of the co-signer.  Think of it this way. If your credit score is awful, the rate you would be offered as a solo borrower will most likely be awful as well.  Similarly, if your cosigner has a great credit score, the hypothetical rate offered to him/her as a solo borrower would be fairly benign.  The rate offered to you with a cosigner will be somewhere between these two rates. Thus, the worse your score is and the better your cosigner's is, the bigger rate drop you will get.  My credit score was faily good (740) so the addition of my cosigner (who has nearly perfect credit) only dropped my rate by .5%

queencruella

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Re: Co-signer lowers private loan interest rates?
« Reply #2 on: June 29, 2006, 01:04:41 PM »
It depends on the lender. I was able to find a lender that didn't require people with excellent credit to get a cosigner, but others will require a cosigner for the best rate no matter what your credit is.

StepUpT0theMike

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Re: Co-signer lowers private loan interest rates?
« Reply #3 on: June 29, 2006, 01:22:34 PM »
It depends on the lender. I was able to find a lender that didn't require people with excellent credit to get a cosigner, but others will require a cosigner for the best rate no matter what your credit is.

Exactly right.  I got a variety of offeres both with and without cosigners before deciding which one to go with.  My advice to the OP is to do the same.  Just make sure that you don't sign the loan documents electronically when you fill out the application.  As long as you don't sign, you can always cancell the loan offers that you don't want.  As a general rule, having a cosigner will get you a better rate, but if you are especially averse to having a cosigner, you should still be able to find private loan offers.  Additionally, you might want to look into the Grad Plus loans as well.  You might be able to get a  fixed rate through Grad Plus (8.5%) that is better than the variable rates you would get privately without a cosigner, especially since these rates are likely to increase in the future.

queencruella

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Re: Co-signer lowers private loan interest rates?
« Reply #4 on: June 29, 2006, 01:37:21 PM »
The negative to Grad Plus is that there is no grace period before you have to start paying back loans. With private lenders, you'll get 6 or 9 months depending on the lender.