HOBOKEN, N.J.–Cosigners on student loans, who are most often family members, often end up hurting their own financial health as a result of co-signing and regret having done so.
In fact, half of co-signers said they have put their own retirements in jeopardy as a result.
That’s according to a new survey conducted by LendEdu, a marketplace for student loans, student loan refinancing, credit cards, and personal loans.
The company said its data shows that approximately 90% of all private educational loans are cosigned. In its survey of 500 parents who have cosigned on their children’s private student loans, the company said it found one-third said they did not fully understand the risks of cosigning when they initially agreed.
Among the other findings:
* 56.80% of cosigners believe that their credit scores have been negatively impacted by cosigning on private student loans.
* 34.40% of cosigners' children have made a late payment the cosigned loans.
* 51.20% of cosigners felt that their children's student debt is putting their retirement in jeopardy.
* 58.40% of cosigners answered that their children have asked them for help making monthly payments.
* 65.80% of cosigners have helped their children make monthly payments.
* 35% of cosigners regret making the decision to cosign on a private student loan.
* 69.80% of cosigners have not asked or have not had their children ask their lender for a cosigner release.
* 59.40% of cosigners reported their children have not considered refinancing their student debt.
* 35.80% of cosigners have had their children make late payments which negatively impacted their credit scores.
* 34% of cosigners said they would not cosign on their children's student loans if they could do it again.
* 45% of cosigners did not consider PLUS loans as an alternative funding method.
* 34.40% of cosigners said cosigning has hurt their ability to qualify for mortgages, auto loans, or other types of financing.
LendEDU said it also asked the following: “Has your child considered refinancing the student debt as a way to release you as a cosigner?” Fifty-nine percent of cosigner respondents said that option had not been considered.
The company noted that lenders may present a cosigner release option if a borrower makes on-time payments for a certain period and is deemed creditworthy.
For info: www.lendedu.com