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Key takeaways
- Some private student loan companies offer co-signer release as a perk, which allows you to remove a co-signer.
- To qualify, you usually have to make a certain amount of on-time payments and meet other lender requirements.
- If co-signer release isn’t an option, an alternative is refinancing the student loan into your own name.
Parents are taking a risk when co-signing their child’s student loans — but with a co-signer release, a borrower can remove a co-signer from their student loan account after meeting certain requirements. Most lenders look at credit score, annual income and the number of on-time, consecutive payments to determine eligibility. If you meet those requirements, you may be able to apply for co-signer release in as little as two years.
If you’re considering applying for a private student loan to help pay for school, getting a co-signer can help improve your odds of getting approved and securing favorable terms. If you want to release the co-signer once you have financial independence, choose a lender that offers co-signer release. A few companies make this process faster than others.
Best student loans with the fastest co-signer release
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Sallie Mae offers undergraduate loans, career-training loans and a long list of graduate loans. With a Sallie Mae loan, you can remove a co-signer after 12 consecutive on-time monthly payments, including principal and interest — one of the fastest co-signer releases in the industry.
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- You’ve graduated or completed your certificate program.
- You’re the age of majority in your state.
- You’re a U.S. citizen or permanent resident.
- Your student loans are not in hardship forbearance or enrolled in a modified repayment program the year before you apply.
- You meet approval standards after providing proof of income and undergoing a credit review, similar to what you’d experience if you were to apply for a new loan.
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Pros
- Co-signer release possible after 12 consecutive payments.
- Part-time students can qualify.
- Provides student loans for career training.
Cons
- Limited repayment terms.
- Does not offer refinance loans.
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SoFi offers a variety of private student loans, including undergraduate loans, graduate loans, law school loans, MBA loans and parent loans. Co-signer release is available only on private student loans, but it also has refinancing options available.
If you have SoFi private student loans, you may be able to request co-signer release if they were disbursed after May 1, 2019. All loans disbursed before that date are ineligible.
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- Make 24 consecutive on-time principal and interest payments.
- Be the age of majority in your state.
- Meet the lender’s underwriting criteria.
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Pros
- No fees.
- Low minimum rates.
Cons
- Does not disclose underwriting requirements.
- Maximum undergraduate repayment term is 15 years.
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Risla is one of the few private student loan companies that provides an income-based repayment plan. Rhode Island Student Loan Authority offers undergraduate loans, graduate loans, parent loans and refinance loans nationwide. While it’s not available on refinance loans, RISLA does offer co-signer release after 24 consecutive on-time monthly payments on its private loans.
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- You’re at least 18 years old.
- You’re a U.S. citizen or permanent resident.
- You earn at least $60,000 annually.
- Your FICO credit score is 800 or higher.
- Your debt-to-income ratio is 40 percent or below.
- You’ve never been enrolled in RISLA’s income-based repayment program.
- You don’t live in Colorado, Connecticut or Maine.
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Pros
- Low starting rates.
- Multiyear loan approval option.
- Up to $2,000 in loan forgiveness through internship program.
Cons
- Must have 800 credit score to qualify.
- High minimum income requirement.
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Ascent offers loans to graduates and undergraduates with plenty of perks — with or without a co-signer. Ascent is an online lender offering U.S., DACA and international students private undergraduate and graduate student loans. In addition to the traditional co-signed loan, borrowers can choose a future income-based student loan. After making 12 consecutive, on-time full principal and interest payments, you can apply to release your co-signer.
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- You’ve completed your program.
- You have an annual income of at least $24,000.
- You have at least two years of credit history with a minimum credit score.
- You’re of majority age in your state of residence.
- You’ve requested to enroll in automatic payments.
- You’re a U.S. citizen, permanent resident or DACA student.
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Pros
- Possible to release co-signer after only 12 months.
- Autopay discount.
- No required payments up to nine months after graduation.
Cons
- International student’s don’t qualify for co-signer release.
- Refinance student loans aren’t available.
What is a co-signer release?
Co-signer release is a benefit some private student loan companies offer that allows you — the primary borrower — to remove the co-signer from the loan before repaying it in full. Once the co-signer is released, the primary borrower is solely responsible for repaying the loan.
Eligibility requirements for co-signer release vary. However, lenders generally review certain factors, such as your credit score, debt-to-income (DTI) ratio and income, to assess your ability to repay the loan on your own. Plus, many student loan companies require you to make a certain number of payments before you can remove the co-signer.
Bankrate insight
Federal student loans don’t come with the option to release a co-signer. That’s because, unlike private student loans, most federal student loans don’t require a credit check or a co-signer.
How to release a co-signer from a student loan
The application process varies by lender, but here are the general steps you take to release your co-signer from a student loan.
- Review the eligibility requirements: Read the lender’s co-signer release eligibility requirements to see if you qualify.
- Gather required documentation: Although documentation requirements vary, some student loan companies may ask you to provide proof of income in the form of pay stubs or tax returns, proof of graduation and proof of citizenship.
- Fill out co-signer release application: You may need to fill out an application on paper and upload it to your online account or mail it to the lending institution. For others, you may be able to apply through your online account.
What to do if you can’t release a co-signer from a student loan
Release from a loan can help your co-signer by removing the balance and payment information from their credit report. This can make it easier for them to get approved for credit, reduce their DTI ratio and also avoid any potential negative consequences if the primary borrower can’t make their payments in the future.
But release may not be possible for some borrowers or with all lenders. If it’s not an option, consider:
- Improving your credit: If you were denied because you don’t meet the underwriting criteria, work on building your credit history so you can get approved the next time you apply. In some cases, you may also need to increase your income or meet other stipulations to get approved. Check with your lender to find out the reasons for the denial and take immediate action.
- Refinancing the loan: If your lender doesn’t offer co-signer release, you may be able to refinance the loan in your name alone. Credit underwriting requirements can vary by lender, so it’s possible to get a new loan with a lender that has less-stringent eligibility criteria. Pay attention to the interest rate and repayment term when you apply. If the loan becomes more expensive, it may be worth waiting until your credit situation has improved.
There’s no right approach for everyone in this situation, so think carefully about your needs and talk to your co-signer before you decide how to proceed.
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