Co-signer release is a program that allows a borrower to remove a co-signer from their student loan account after meeting certain requirements. This usually involves making a minimum number of consecutive payments on time and meeting the lender’s eligibility criteria to maintain the loan on its own.
A quick co-signer release can be a big draw for students who initially need to take out a loan with their parent. Here’s what you need to know about the lenders that offer the fastest path to cosigner release.
4 Companies That Offer Quick Release Co-Signers
If you are considering applying for a private student loan to help pay for your education, getting a co-signer can help improve your chances of being approved and securing favorable terms, but many students will want to release the co-signer once ‘they will have financial independence.
Here are four companies that let you delete a co-signer in two years or less.
Sallie Mae offers undergraduate loans, vocational training loans, and a long list of graduate loans.
With a Sallie Mae loan, you can release a co-signer after 12 consecutive on-time monthly payments, including principal and interest – one of the fastest co-signer releases in the industry. Other requirements include:
- You have graduated or completed your certificate program.
- You are the age of majority in your state.
- You are a US citizen or permanent resident.
You will also need to provide proof of income and undergo a credit check, which is similar to what you would do if you were to apply for a new loan.
CommonBond offers both private student loans and student refinance loans. Options include undergraduate loans, graduate loans, MBA loans, medical loans, and dental loans.
The lender’s co-signer release program requires 24 consecutive on-time monthly payments of principal and interest for school loans and 36 monthly payments for its refinance loans. There are only three other requirements:
- You must have graduated from the study program for which you took out the loan.
- You must be at least the age of majority in your state.
- You will need to undergo a credit check based on the lender’s current underwriting criteria.
SoFi was the first financial institution to offer student loan refinancing, but it also offers a variety of private student loans, including undergraduate loans, graduate loans, law school loans, MBA loans, and loans to parents. Co-signer release is only available for private student loans.
If you have SoFi private student loans, you may be able to request a co-signer release if they were disbursed after May 1, 2019. Any loans disbursed before this date are not eligible.
To qualify, you must make 24 consecutive principal and interest payments on time. You must also be the age of majority in your state and meet the lender’s underwriting criteria.
The Rhode Island Student Loan Authority offers undergraduate loans, graduate loans, parent loans, and refinance loans nationwide. Although not available on refinance loans, RISLA offers a co-signer release after 24 consecutive monthly payments on time on its private loans.
Unlike other lenders, RISLA is transparent about what it takes to get co-signer release approval. Eligibility requirements include:
- You are at least 18 years old.
- You are a US citizen or permanent resident.
- You earn at least $40,000 per year.
- Your FICO credit score is 680 or higher.
- Your debt to income ratio is 50% or less.
- You have enough cash in checking, savings and investment accounts to cover at least one month of your financial obligations, and this balance has been on deposit for 30 days or more.
- You have never been enrolled in RISLA’s income-based reimbursement program.
- You don’t live in Colorado, Connecticut or Maine.
How to release a student loan co-signer
The process for applying for a co-signer release varies by lender. In some cases, you may need to complete a paper application and upload it to your online account or mail it to the lending institution. In others, you may be able to apply through your online account.
Because there’s no one way to do this with every lender, check with yours directly to find out what the process is like, including where you can find the application, what information and documents you need to provide, and how much the process takes from start to finish.
What should you do if you can’t release a student loan co-signer?
The student loan co-signer release can help your co-signer by removing balance and payment information from their credit report. This can make it easier for them to get approved for credit, reduce their debt-to-equity ratio, and also avoid any potential negative consequences if you can’t make your payments in the future.
But co-signer release may not be possible for some borrowers or with all lenders. If releasing the co-signer is not an option, here are two options to consider:
- Work on improving your credit: If you’ve been turned down because you don’t meet the underwriting criteria, work on building your credit history so you can be approved the next time you apply. In some cases, you may also need to increase your income or meet other conditions to be approved. Check with your lender to find out the reasons for the denial and take immediate action.
- Refinance the loan: If your lender doesn’t offer a co-signer release at all, you may be able to refinance the loan in your own name. Credit underwriting requirements may vary from lender to lender. It is therefore possible to obtain a new loan from a lender whose eligibility criteria are less strict. Just be sure to pay attention to the interest rate and repayment term. If it ends up costing more, it may be worth waiting until your credit situation improves.
There’s no right approach for everyone in this situation, so think carefully about your needs and those of your co-signer before deciding how to proceed.