What Do You Do if You Co-Sign a Bank Student Loan & Would Like Your Name Taken Off as a Co-Signer?
Co-signing on a student loan makes you financial responsible for the entire loan balance, plus interest and fees. When you sign the agreement, you are assuming a risk that the lender did not want to take. If you decide you no longer want the responsibility, getting off the hook is not always easy. You cannot remove your name without the student's cooperation. If the student agrees and has demonstrated the ability to repay the debt, the chances of having your name removed from the loan are improved.
Contact the lending institution to obtain information about removing your name from the loan. Some banks will release a co-signer, provided the borrower makes a certain number of loan payments. For example, Wells Fargo allows students to request a co-signer release after making 24 consecutive payments. Citizens Bank allows students to release the co-signer after 36 consecutive payments. Other lenders might require up to 48 consecutive on-time payments before a student can take a co-signer off the loan.Step 2
Ask the primary borrower to initiate the process by contacting the lender. In addition to the payment criteria, the bank will run a credit check on the student to make sure he qualifies for the loan on his own. The student will need sufficient income to prove he can make the payments alone.Step 3
Suggest the student refinance the loan without your name. If she does not qualify for financing alone, she can have someone else co-sign on the loan. If the student cannot gain approval and does not have a willing co-signer, you must remain on the loan until it is satisfied or until the student can meet the qualifications to have you removed.Step 4
Talk to the student about consolidating his debt. If the student has multiple student loans, he might benefit from refinancing the loans into a single loan payment with a potentially lower interest rate. Some consolidation loans are specifically aimed at helping college graduate students. These graduate loans can offer a more flexible credit criteria and longer repayment terms, making it easier for students to qualify without a cosigner.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.