Credit question - cosigning

Discussion in 'General Discussion | Credit Cards' started by tulane09, Jun 5, 2013.  |  Print Topic

  1. tulane09

    tulane09 Silver Member

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    Well not directly related to credit cards, it may have an impact on my future applications...

    I just cosigned for my fiance's student loan, what is the impact of cosigning on my credit? I know it goes on as debt for me, but do I get positive credit for her paying it off? Both of us gainfully employed and secure in our jobs, she just didn't have the credit clout (short history) to get the lowest rate.
     
  2. servo

    servo Silver Member

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    is it a private student loan, or through direct loans or sallie mae? They're treated differently from what the loan officer co-worker friends I had at my prior employer told me. When applying for new credit, many lenders don't really pay a lot of attention to the sallie mae/DLS loans, but they consider private loans to be like any other unsecured loan. Either way, it shouldn't be a big impact to you if she pays it on time, but it's typically not recommended to do a lot of joint credit.

    My financial advisor suggested that if you can qualify for the loan on your own and not be in a significant rate disadvantage (is saving $2,500 over the life of a student loan really worth it, for example?) then one person should get it, including car loans and mortgages even. If both people get into a financial hardship, losing one person's credit to bankruptcy is significantly better in the long-term for the family than losing both.
     
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  3. tulane09

    tulane09 Silver Member

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    It's private through WellsFargo. Rate is dropping from 6.6 to 4ish. Should be savings of about $6k in interested over 10 years.
     
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  4. rockyrock

    rockyrock Silver Member

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    Considering your finances will be intertwined soon, that $6k savings will impact you as well. Im always reluctant to co-sign but in this case it looks advantageous to both of you. Maybe after a year or two when she has established herself you can be removed from the account.

    Good luck and congrats on your pending nuptials!
     
  5. marcwint55

    marcwint55 Gold Member

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    It sounds like it is too late to change your mind, but keep in mind that student loans can't be wiped out by bankruptcy or any other means, so you are on the hook for this loan until it is paid off.
     
  6. tulane09

    tulane09 Silver Member

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    We've only applied to refinance, the application is pending. Again I'm not too concerned about not being able to pay (even if the whole thing was on me, I would be more than comfortable covering the amount). My bigger question is simply how does it affect my credit score?
     
  7. marcwint55

    marcwint55 Gold Member

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    it will show up as an obligation, but will not greatly affect your score. the only thing it can greatly affect is if you apply for a mortgage, the monthly obligation will be factored in.
     
  8. tulane09

    tulane09 Silver Member

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    That's fine since it would be a joint mortgage and it would show on hers anyway.
     

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