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Questions About Student Loan Refinancing Options

I am a student, have no credit history and have limited options on co-signers. Am I out of luck?

Here’s the situation:
1. I have about two months of credit history with one credit card, and I paid off the balance on time no problem.
2. I am a sophomore, have already filled out FAFSA, and am already taking out federal loans.
3. I need an additional private loan of $6000 within three weeks.
4. My best candidate for a co-signer is my mother (My other closest family members are definitely unable to help me). Her credit score is good, but she has no job. She will have to get a loan of her own soon for a car, once she gets a job.
5. I have read on different websites that co-signing a loan affects the co-signer’s credit score. They all mention that a co-signer suffers if the borrower doesn’t pay payments, but I am assuming I will be able to get a job and continue to be responsible with my money. Does simply co-signing on a loan automatically hurt the co-signer’s credit score? Does this mean that my mother will not be able to get a car loan or refinance our home if she co-signs on my loan?

So my question comes in these pieces: Do I have to have a co-signer, given my nearly-non-existent credit history? Will my co-signer’s credit score suffer enough to prevent my co-signer from taking out her own loan? Also, does anyone have any recommendations on where I should go for a good private student loan?

Thank you in advance for any advice.
I am studying abroad; if I were to back out now I would be throwing away several thousand dollars. I didn’t know until last minute which scholarships I was getting (I applied to several scholarships, totaling $20000, but am receiving just under half of it). The $6000 deficit I am in now is after scholarships, wages, and federal aid.

Industry Expert answers:

The co-signers credit IS impacted. Lenders look at your debt to income ratios. If she co-signs she will be considered to have 6000 against her income as surely as if she took the loan herself. She is nuts to be willing to sign when she is not employed. You are nuts to ask her. It is a great way to cause nearly unlimited damage to your relationships

Personal loans require the very best of credit and/or collateral – you appear to have none. Taking student loans is a truly a dangerous game. I know many people who are still paying them 20 years later. I would rather a person drop out a semester and work rather than go in debt – even for education and I encourage you not to do so. If you continue taking student loans expect Ginnie Mae to be living in your spare room for decades demanding money.

Yes, I know all the arguments that you will earn more and everyone else does it but too many people find their perceived income increase does not go to pay off loans because they increase their lifestyle of get married or have kids and loans live with you until your own kids are in college.

Work if you need the money. This idea isn’t widely accepted anymore, but if you need the income, WORK! You could also try attending an affordable local college to get your first few years of required classes done. Then transfer to the school of your dreams if and only if you can pay cash.

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