State College Consolidation (The Co-Borrower)
When you are considering a state college consolidation loan you need to understand all aspects of the program. You can choose to take out a federal or private loan for consolidation, and each has its own benefits. When you have both private and federal student loans you will want to consolidate them separately because you can lose benefits from your federal loans when you combine them with your private loans in state college consolidation.
Federal Loan Consolidation Program
State college consolidation loans can be handled by the federal loan consolidation program. There are no fees for federal state college consolidation loans. There is also no credit check required which means no co-signer or co-borrower. You benefit from various repayment types as well as deferment and forbearance. The loans are backed by the government and you can rest assured they will be paid one way or another. Should you default; the government can easily garnish your wages or seize your income taxes for repayment.
Private State College Consolidation Loans
Private state college consolidation loans are highly competitive but still relatively easy to have approved. It is necessary to go through a credit check for this type of consolidation and, in some instances, have a cosigner or co-borrower to guarantee that your loan will be repaid. In many cases, the co-borrower is relieved from repayment after a period of consecutive, on time loan payments. The cosigner’s credit will have to be checked and approved before the loan is given. Having a cosigner gives you the benefit of being able to avail considerably lower interest rates due to their established, good credit rating.
The requirements for being a co-borrower include:
- US citizenship with a valid Social Security Number and US mailing address
- Permanent residency with USCIS documentation
- Be of legal age (18-21 typically is the range)
- Have a good credit history that includes some time period of borrowing and repaying
- Have no bankruptcies in the past seven years
- Have no student loan default in their history
- Have no excessive delinquencies on loans, no liens, no charge-offs, no judgments
- Be willing and able to sign the loan documentation (if they are unable or unwilling to do so you will need to star a new application with a new cosigner)
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