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CO-Signing for my daughter's student loans

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Anonymous
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CO-Signing for my daughter's student loans

Why does being a co-signer for my daughter's student loans affect my debt? I have co-signed for two of her loans that she pays for, and has not been late on at all? Yet the amount of the loans is sowing on my credit reports as if I have directly incurred that debt; it makes my debt to income ratio blow up? Is there any way to correct this?

Message 1 of 14
13 REPLIES 13
laz98
Senior Contributor

Re: CO-Signing for my daughter's student loans

 


@Anonymous wrote:

Why does being a co-signer for my daughter's student loans affect my debt? I have co-signed for two of her loans that she pays for, and has not been late on at all? Yet the amount of the loans is sowing on my credit reports as if I have directly incurred that debt; it makes my debt to income ratio blow up? Is there any way to correct this?


co-signing means you are equally responsible for the debt.  it's like being a joint account holder on a credit card.  there is nothing wrong with the reporting.

 

Message 2 of 14
Anonymous
Not applicable

Re: CO-Signing for my daughter's student loans

 
Message 3 of 14
Anonymous
Not applicable

Re: CO-Signing for my daughter's student loans

Thanks...can you request that you be dropped as a co-signer after a period of time? Does that work? She has not been late in 2 years or so, and I need to remove this debt so I can get a refi on my home. How about consolidating her Sallie Mae loans? Does that remove my debt by showing the loans were paid off?

Message 4 of 14
laz98
Senior Contributor

Re: CO-Signing for my daughter's student loans

 


@Anonymous wrote:

Thanks...can you request that you be dropped as a co-signer after a period of time? Does that work? She has not been late in 2 years or so, and I need to remove this debt so I can get a refi on my home. How about consolidating her Sallie Mae loans? Does that remove my debt by showing the loans were paid off?


 

i have HEARD of people doing this, but very, very rarely.  so my first inclination is to say no.

 

consolidating will not remove the loans from your credit reports.  it just closes the ones you have now, & opens up a new giant loan.

Message 5 of 14
haulingthescoreup
Moderator Emerita

Re: CO-Signing for my daughter's student loans

 


@Anonymous wrote:

Why does being a co-signer for my daughter's student loans affect my debt? I have co-signed for two of her loans that she pays for, and has not been late on at all? Yet the amount of the loans is sowing on my credit reports as if I have directly incurred that debt; it makes my debt to income ratio blow up? Is there any way to correct this?


 

Her credit and/or income was not strong enough at the time she applied for the loans to be approved in her name only. You were needed to co-sign, so that if she had a problem, they can come after you. This is how all joint credit works: credit cards, mortgages, etc etc. That's why it's on your credit reports --you are liable for the debt, as is she.

 

Even in types of credit that are much more flexible, like joint credit cards, it's very difficult to get off as joint owner. Generally the remaining signer (your daughter in your case) would have to be able to qualify for the account on his/her own. And that's just for a credit card.

 

It's wonderful that you were willing to help your daughter out, but I'm afraid that that's how co-signing works. Smiley Sad

 

(And kudos to laz, who explained it very well!)

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 6 of 14
JM-AM
Valued Contributor

Re: CO-Signing for my daughter's student loans


@Anonymous wrote:

Thanks...can you request that you be dropped as a co-signer after a period of time? Does that work? She has not been late in 2 years or so, and I need to remove this debt so I can get a refi on my home. How about consolidating her Sallie Mae loans? Does that remove my debt by showing the loans were paid off?


IME with my DW I had co-signed her student loans. After her making timely payments she consolidated her loans in her name only. The TL's closed and had a $0 balance. It removes all the debt on those loans once they report paid and closed with the $0 balance. 

 

Good Luck

Good Luck
May all your dreams and wishes become a reality!
Message 7 of 14
laz98
Senior Contributor

Re: CO-Signing for my daughter's student loans

 


@JM-AM wrote:

@Anonymous wrote:

Thanks...can you request that you be dropped as a co-signer after a period of time? Does that work? She has not been late in 2 years or so, and I need to remove this debt so I can get a refi on my home. How about consolidating her Sallie Mae loans? Does that remove my debt by showing the loans were paid off?


IME with my DW I had co-signed her student loans. After her making timely payments she consolidated her loans in her name only. The TL's closed and had a $0 balance. It removes all the debt on those loans once they report paid and closed with the $0 balance. 

 

Good Luck


this makes sense.  i forgot that the old loans would be closed at $0.  this might work for you, OP.  i will cross my fingers for you!  Smiley Happy

 

Message 8 of 14
Tazman81
Established Contributor

Re: CO-Signing for my daughter's student loans

Most student loan places will also allow the co-signer to be removed from the debt after there have been a certain number of consecutive on time payments.   Usually its like 24 or 36 on time payments.  You may want to check with the company that holds your loan to see if they have anything like this.  that way you can go ahead and get yourself off of the loans.  If they do not, then you may want to see if she can get a consolidation loan solely in her name.  That will get you off the loan, and will have the loans report a zero balance on your reports.


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Message 9 of 14
Anonymous
Not applicable

Re: CO-Signing for my daughter's student loans

Thanks for replying...what do "IME" and "DW" mean in your reply?

Message 10 of 14
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