Can you cosign a student loan with bad credit?

Can you cosign a student loan with bad credit? Here's what you need to know about getting a private loan with an imperfect credit history. (iStock)

Most students who borrow for school need a cosigner to do so. In fact, as many as 92% of private student loans that originated during the 2019-2020 academic year required a cosigner, according to data from MeasureOne.

Cosigners are necessary when students can't qualify for a loan on their own because they don't have a solid credit history or sufficient income.

Unfortunately, cosigners can only help a student to qualify if they have positive credentials. If you have bad credit, for example, you can't increase the odds of loan approval by cosigning a student loan.

But that doesn't mean there aren't other options for borrowing for school.

Can you cosign a loan with bad credit?

Cosigners agree to share responsibility for a loan with primary borrowers. Lenders require a cosigner in circumstances where someone who is borrowing money isn't able to qualify for a loan on their own because they present too great of a risk.

To see what you'd pay on a private student loan, either with or without a cosigner, you can visit Credible today to view a rates table that allows you to compare fixed and variable rates from multiple lenders at once with no impact on your credit score.


Private student loan lenders are often uncomfortable providing educational financing directly to students because young people going to school are typically considered high-risk borrowers. They don't have a solid credit history that shows they've been responsible for loan repayment, nor do they have proof they're currently earning enough income to pay off the loan.

As a result, would-be borrowers can apply with a cosigner who does have good credit and solid proof of income. If the lender believes they can count on the cosigner to pay the loan if the student doesn't, then they'll approve the loan.

Of course, a cosigner only increases the odds of approval if lenders view them as a low-risk borrower. That generally means anyone who is going to cosign will need to have good or excellent credit as well as proof of sufficient income to make monthly payments.

A cosigner who meets these criteria means they will be legally (and equally) responsible for repayment and, if necessary, the lender can collect any delinquent payment from the cosigner.

You can save cash by choosing the right private student loans — and online marketplace Credible can help. With Credible's free tools, you can compare rates from eight different lenders within just minutes.

What loans can a student get without a cosigner?

Unfortunately, if you have bad credit and your child or someone else you're close to asks you to cosign a student loan, you most likely aren't going to be able to provide much help in securing loan approval. While you could submit an application as a cosigner, chances are the loan would be denied or offered only at a very high interest rate if the lender believes you're a high-risk borrower.

But just because you can't cosign private loans doesn't mean there aren't other options to borrow for school. In fact, there are three possible solutions:

  1. Students should max out federal loans: Students don't have to show proof of income or good credit to qualify for most federal student loans. That means no cosigner is required. Federal loans also come with lots of benefits for borrowers that private loans don't, so students should always max them out before taking out any private loans.  
  2. Parent PLUS Loans: Parents of undergraduate students may be eligible to take out PLUS Loans. While you cannot qualify for them with "adverse credit," the requirements to get approved for this specific type of federal loan are generally laxer than loan approval requirements set by private lenders. You should consider taking out PLUS Loans as a parent after your child has exhausted eligibility for other federal loans.  
  3. No cosigner student loans: While many private student loan lenders require a cosigner for student borrowers, not all do. There are some lenders that specialize in making no-cosigner loans. These lenders often take many factors into account beyond just credit score and current income, such as future earning potential.

Exploring each of these options is important if you are unable to cosign student loans because your credit score isn't very good.

Fortunately, an online marketplace like Credible can walk you through the various loan products currently available and snag you a good deal. Compare student loan lenders and rates today by clicking here.


Refinance if you take out a student loan with bad credit

If you are able to take out a student loan with bad credit, chances are you'll pay a higher interest rate because you present more of a risk to lenders. If that's the case, then refinancing student loans in the future may be a good idea.

Refinancing involves taking out a new student loan to repay the old one. If your income or credit has improved since you obtained your initial loan, you may be able to substantially reduce your rate. You can visit Credible to view a rates table that compares rates from multiple lenders at once to find out what rates you could qualify for and how much you can save by refinancing.