Study: Student Loan Borrowers Can Get Lower Rates by Comparing Cosigners Designates July as “National Cosigner Appreciation Month”

SAN FRANCISCO--()--As student loan application season gets underway, a new analysis from online loan marketplace has found that students who take out private student loans can get more than a two percentage point lower interest rate, on average, by applying with a cosigner rather than going it alone. Borrowers with cosigners are also more than five times more likely to be approved for a loan.

Private student loans are often used to cover funding gaps when families hit their limits on federal student loans. Banks, credit unions and online lenders provide these private loans at rates that can be competitive with the federal government’s PLUS loans, depending on the borrower or cosigner’s credit worthiness. Because students often have little to no credit history, most private student loans require a cosigner.

Cosigners Save Borrowers Money

A lower interest rate on a private student loan can meaningfully impact a borrower’s total education debt, according to an analysis of more than 90,000 rate requests for private student loans submitted through the marketplace in the last year. Credible found that for a freshman who will defer payments until after graduation, adding a cosigner can save $3,505 when taking out a $10,000 fixed-rate loan that's paid back over 10 years.

Having a cosigner reduced the lowest rate that borrowers prequalified for by 2.36 percentage points, on average. Credible’s analysis found that borrowers across the entire credit spectrum -- even those with good or excellent credit -- could get better rates by adding a cosigner.

The benefits of applying with a cosigner are tightly correlated with the cosigner's credit score -- the higher the score, the lower the interest rate offered by lenders. The marketplace allows students to request rates from multiple lenders and compare multiple potential cosigners to see how each improves their rates.

Although parents usually fill the role, anyone with good credit who wants to help a student can be a cosigner. Credible found that more than one in four undergraduate students turn to other relatives or a spouse, friend, or employer to serve as a cosigner.

“Student debt is a long-term obligation, so it’s important for students and their cosigners to enter into it wisely,” said Stephen Dash, founder and CEO of “Not everyone should be a cosigner, nor is a parent necessarily the best option. The number one thing families should do when they are looking at taking out private student loans, is to compare options from multiple lenders.”

In addition to helping borrowers qualify for private student loans and obtain offers from multiple lenders, found that students taking out loans with cosigners were more likely to choose a fixed-rate loan. About six in 10 students with cosigners (59.3 percent) chose fixed-rate loans, compared to 36.6 percent of borrowers who took out loans on their own.

Most students taking out loans on their own (55.8 percent) chose a 5-year repayment term, compared to 38.2 percent of students with cosigners. The shorter the repayment term, the lower the interest rate offered by most lenders, but the higher the monthly payment.

Other highlights from’s analysis include:

  • Cosigners help students qualify for loans. Close to half of undergraduates with cosigners (43.7 percent) who requested rates through the platform qualified to see rates. Only 8.4 percent of those who requested rates without a cosigner were eligible.
  • Cosigners get borrowers lower rates. Students requesting rates with a cosigner prequalified for 10-year fixed-rate loans with an average minimum rate of 5.99 percent, compared to 8.88 percent for students without cosigners.
  • Cosigners make college and graduate school possible. More than nine out of 10 private student loans to undergraduates (92.3 percent) facilitated through the marketplace were cosigned. Graduate students were more likely to obtain loans on their own, but 64 percent of loans to graduate students were cosigned.

July is “National Cosigner Appreciation Month”

To recognize cosigners who put their personal credit on the line to help their loved ones achieve their dreams, is declaring July “National Cosigner Appreciation Month.” The company is celebrating with e-cards that help student borrowers thank their cosigners, as well as an upcoming social media contest, in which student borrowers and their cosigners can win up to a $5,000 prize that can be applied toward their student loans.

“As a group, cosigners are often the underappreciated heroes of our higher education system, despite the dreams that they make possible and the real savings they bring their student borrowers,” Dash said. “We’re more than happy to help them get the recognition they deserve.”

About Credible

As a marketplace that empowers consumers to discover financial products and services that are the best fit for their own, unique circumstance, is fiercely independent and committed to delivering fair and unbiased solutions for millennials. Credible’s integrations with lenders and credit bureaus allow consumers to access actual rates through a neutral platform, without sharing their information until they’re ready to proceed with an offer. The platform provides an unrivaled customer experience, as reflected by hundreds of positive Trustpilot reviews and a TrustScore of 9.5/10. For more information, news media may email


Mike Jurs, 415-218-7978
Director, Communications & Content

Release Summary

A new analysis from online loan marketplace illustrates the value that student loan cosigners deliver to their borrowers.


Mike Jurs, 415-218-7978
Director, Communications & Content