When you’re seventeen or eighteen years old, it can be almost impossible to get approved for a loan all by yourself. Thus you need the help of someone else to help you get approved. A cosigner. This could be a family member or a close family friend. Asking them can be pretty nerve racking. By signing the loan that person is putting their credit on the line and that’s a pretty big deal. So when it comes to asking someone to cosign, what should you do? Well, here’s a helpful list of things to consider when you are ready to ask.
When To Ask?
Choosing the right time to ask someone to be your cosigner can be difficult. Doing it in person is the best when looking for a loan. This way you can clearly explain everything and answer any questions the person has. Asking someone to be your cosigner isn’t just asking a question, it’s more like a conversation. Try scheduling a lunch or a dinner with the person. Make sure you have time to actually have a conversation. This isn’t something you probably want to talk about during a family birthday party. If you can’t ask someone in person the next best thing would be by phone or even video chat. Asking by email or text message can be a bit too informal and could also lead to confusion.
It is also better to ask them sooner rather than later. Loans can take a little while to process, so even if the say ‘yes’ right on the spot it can still be a few weeks before you actually get approved for the loan. This means asking them a week before your first payment is due is not a very good idea. You also have to plan for the fact that they might say ‘no’ and you might need to look for a new cosigner.
Gather All Your Information
Taking out a loan requires a lot of paper work and information. The first thing you need to do is gather up all the information about the loan you will be taking out. Make sure you know what company you’ll be taking the loan out with, how much you will be taking the loan out for, what kind of interest you will have, and the type of payment plan you will be using. Make sure all of this information is clearly organized so that you can communicate it to your cosigner well. It also might be a good idea to make a copy of all this information for your cosigner so that they can clearly see what you are talking about.
Have a Plan
Before you go asking someone to be your cosigner, you need to have a plan of how you are going to pay back the loan. This is super important. If you don’t have a plan, they’re probably going to say ‘no’ or not give you an answer until you come up with one. It’s important to remember that by signing your loan, they are putting their credit on the line. When you take out a loan you must select the rate at which you pay it back. Research these options extensively before making a decision. Once you’ve decided on the rate you will be paying it back make sure you have ideas on ways you will be getting the money.
Be Ready To Answer Questions
There are going to be a lot of questions and you need to know what you’re talking about. The most important thing to do before asking someone to cosign your loan is do the research. The person is going to ask you a lot of questions about interest rates and payment options. More confident and detailed answers may be a deciding factor when it comes to their decision. Make sure you know your payment plan like the back of your hand because that is going to be one of the most important topics. You’ll probably get some brownie points if you ask them if they have any questions, adults love it when you do that. Don’t throw yourself a pity party in front of them, but make sure they understand your situation. Clearly explain to them what you need the money for (tuition, room and board, books, etc.) and why you are asking them to help you.
Think About It
Asking someone to cosign your loan is a big deal so don’t be shocked if you don’t receive an answer right away. It may take time for the person to look over all the information and make their decision. The best thing to do is to make sure they understand all the information clearly. Then give them a little time to think about it. Make sure you also say ‘thank you’ even if they are only just considering cosigning your loan. They are taking time out of there day to listen to you and your chances are going to be a lot better if you are thankful for it.
Asking a person to cosign you loan can be scary. However, in order for you to go to college it may be unavoidable. Using these tips will help you be much more prepared for the conversation. Remember that they are thinking about doing you a favor, so be as nice a possible. The experience is not as scary as it may seem, so take a deep breath and just relax.