cosigner on student loan

Only 8% of $ 1.3 billion loan student loan debt of banks and finance companies. But these loans borrowers can give big headache.
Personal loans do not have the same benefits as federal loans and credit facilities for students of payment plans to replace multiple loans or work in the public service. This left the graduates with extensive lists of private loans and some options if they can not manage the costs.
"Most borrowers pain is not able to perform these higher monthly payments, and there is no flexibility, no different payment plans," said Andrew Weber, Athens, Ohio, student counselor loan certificate is specialized to manage private loans.
However, there are ways to lighten the load. You can refinance with a new lender, pay strategically first interest loans or amendment. Here's how to know which one to choose option:
Option 1: refinance their student loans
Who is best for: Borrowers with a solid income and credit history, or you can use a co-signer
If you do not want missed payments on their private loans, but to save money, you can refinance student loan with a new lender. The company will pay your current loan and enter a new loan at a lower interest if they meet the requirements. You can also use a co-signer with great credit, if you are not sure that you get a good deal on your own.
There is less risk of private student loans federal loans to refinance because they do not lose the payment of federal benefits; their loans are now privately owned. The main criteria for funding are:
Good credit. Lenders have different rules for deciding to work with you. Most use them to your FICO score and a score of 680 or more generally, the better. Others see their financial and educational history as a whole. Ultimately, however, consider these lenders criteria similar to what contains your FICO score: If you regularly pay bills on time and do not have a credit card balance bear, for example.
low debt to income ratio. Lenders prefer that the total debt of the customer less of their annual income, but the exact relationship they varied search. Some ask their debt no more than 40% of their income, while others have more stringent requirements.
Proof of employment. Some lenders require that you have worked for at least two years before the refinancing; others simply need your business offer letter to show that it is used. Overall, the refinancing makes more sense for borrowers who work full time and are not concerned about the safety of the workplace.
If you rejected by a lender to refinance, call and ask why. You can get an idea of ​​reason - too much credit card debt, perhaps, or that work is not long enough - and can later reapply.
"MORE: 8 best student loan refinancing options, simple application
Option 2: extra pay to their high interest loans
Who is best for: borrowers who are not suitable for refinancing
If you do not qualify for a refinance, but budget your money at home, focus on the payment of a loan at a time until they are gone.
Make a list of all private loans you are currently paying under, including balances, interest rates and minimum monthly payments. Make a plan to pay more than the minimum monthly amount, and have the additional amount for the loan with a higher interest rate. This will save you more money in interest over time.
Try to earn extra income, so the running costs are not being used (such as cable or gym memberships) or sell by items that do not need. You can eat small pay off your loan, which could authorize rid of more loans. But you free if you focus more money in the long run, on loans that accumulate each month tons of interest.
"MORE: How three graduates of student loans to get rid of - and how you can, too
Option 3: Apply the loan modification programs
Who is best for: borrowers behind on their loan payments to students
Perhaps it is more difficult for your bills for private student loans to pay each month, or if you have already fallen behind in their payments. In this case, refinancing and on their loans is strategically not be available for you.
Additionally, private lenders provide no income payment plans tie their toll from the crowd, you deserve as federal loans do to - what's next for many graduates as a surprise.
"Some borrowers said they knew that they had fewer opportunities than pay for your private student loans, as they with their federal student loans," according to the Bureau of Consumer Financial Protection in a 2012 report.
Private lenders sometimes work with borrowers, but even if they do not support the public on their website. Modification programs often emerge in recent years, and lenders like Discover, Wells Fargo and Sallie Mae responded to the growing pressure some relief to borrowers give.
Your best bet is to go to the source: Call your lender and ask what they can do for you.
"If they have a program of change that will be very clean for the lender and vary from one lender to another," says Weber.
Begin to reduce the interest rate or lower monthly payment, even for a limited period. These options are to delay better than their payments through tolerance, which means that the interest for your total balance to run and be added, will be continued.
to be your goal should their payments to private loans are not ignored; Private loans usually have before a shorter timeline to do the standard federal loans. By default, you can significantly reduce your credit score - and thus their ability to make a home, a mortgage or car loan to get in the future.