July 16, 2010, Newsletter Issue #179: Talk it Over With Your Cosigner

Tip of the Week

If you applied for a loan with a cosigner you should talk any decisions over with him or her. While you may be the primary borrower with no plans of defaulting on the loan, if something were to happen they should at least know what the terms of the loan were.

Discuss the terms of refinancing, repayment options and your current financial status. Keeping your cosigner in the loop helps to insure that all parties are on the same page. It stands to reason that if you have trouble making a payment one month, your cosigner would rather help out than have the loan default.

Cosigners are usually someone you know personally like your parents. This should make it easier to work out any necessary arrangements that would be in the best interests of all parties involved. They may even wish to have a copy of all paperwork related to the loan for their own records. This is a good idea in case something happens to any paperwork in your possession. They may also have their own ideas on reducing student loan interest.

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