Fastest co-signer release for student loans in July 2024.
Having a creditworthy co-signer can increase your chances of obtaining top private student loans with favorable interest rates. However, being a co-signer also entails significant responsibility: You will be responsible for any debt the borrower fails to repay. As a co-signer on a loan, the borrower's debt will be reflected on your credit report and your credit score will be affected by their actions.
A co-signer release option is available from many private student loan lenders, allowing borrowers to release their parent or guardian co-signed on a loan once they can make consistent payments on their own. This can be advantageous for both parties, as the co-signer is no longer linked to the loan, and borrowers can begin to establish financial independence while gaining access to new credit.
CNBC Select has compiled a list of student loans with the fastest co-signer release. Each lender has unique requirements for co-signer release, but all require a consecutive stream of on-time monthly payments. The number of payments required for co-signer release varies by lender. (See our methodology for more details on how we created this list.)
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Best for release after 6 months
If you want to release your co-signer quickly, Edly requires that the student borrower make six consecutive, full monthly payments post-graduation. Additionally, the borrower must pass a credit check, have a minimum FICO® Score of 600, and a debt-to-income (DTI) ratio of no more than 25%. An application must also be completed.
Edly's non-cosigned and cosigned loans, as well as career training loans, feature income-based repayment (IBR) plans, which are uncommon among private lenders. This allows borrowers to have a payment plan that adjusts based on their income changes. Additionally, Edly has a Student Success Team available to provide assistance with study preparation.
Best for release after 12 months
What is Sallie Mae's policy on releasing co-signers after one year of on-time payments?
Sallie Mae is notable for its competitive interest rates and fees, including a 0.25% discount for those who choose autopay. The lender offers a range of repayment options, including interest-only payments during school, a fixed $25 monthly payment during school, and deferred repayment after graduation. Additionally, Sallie Mae provides a 6-month grace period to help students manage their finances during their transition from school to the workforce.
Best for release after 24 months
If you want to take advantage of SoFi's member benefits such as referral bonuses, rate discounts on other SoFi loans, and premium travel offers, SoFi is a great option. It offers a co-signer release option after the borrower has made 24 months of full principal and interest payments.
SoFi offers a range of benefits for student loan borrowers, including no fees, rate discounts, flexible repayment options, multiple repayment terms, financial planning services, and a 6-month grace period.
Best for DACA recipients and international students
What is the co-signer release option offered by Ascent Funding?
Ascent's student loans are accessible to international students studying in the U.S. They offer low fees and rates when a co-signer applies, along with multiple repayment options and a 0.25% rate reduction for autopay. Additionally, there is a 9-month grace period. Ascent provides perks such as cash-back rewards upon graduation and expert coaching to its student borrowers.
Best from a credit union
If you prefer banking with a credit union, PenFed Credit Union is an excellent choice as it offers a fast 12-month co-signer release option. To release a co-signer, borrowers must apply and verify income. It's easy to join PenFed Credit Union; just open a savings account and deposit a minimum of $5.
Sparrow, a student loan marketplace, partners with PenFed to offer prequalified rates from multiple lenders for easy comparison.
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More on our top student loans with fastest co-signer release
Edly Student Loans
Edly provides student and career training loans without requiring a co-signer, and partners with FinWise Bank to offer income-based repayment loans.
Loan amounts
The cost of tuition for academic years ranges from $2,000 to $15,000, with an additional $5,000 to $10,000 for summer terms. There is a lifetime limit of $20,000 to $25,000.
Loan terms
84 months
Loan rate
Loan rate depends on type of loan taken out; autopay incentives apply
Loan fees
No application fee, no origination fee, no prepayment penalties
Sallie Mae
Sallie Mae is a publicly traded company that provides private student loans, scholarships, and various savings accounts, including traditional, high-yield, money market, and CDs to consumers.
Loan amounts
The maximum loan amount that can be obtained through Sallie Mae is $1,000, but if applying directly through Sallie Mae, the loan amount cannot exceed the cost of attendance minus financial aid received, as certified by the school. If applying to Sallie Mae through a partner website, the loan amount may have a lower maximum.
Loan terms
Loan term depends on type of loan taken out
Loan rate
The loan rate varies based on the loan type; a 0.25% autopay discount is offered, and borrowers can opt for a fixed or variable interest rate.
Loan fees
No origination fee, no early repayment penalties
SoFi
Beyond student loan refinancing, SoFi now provides a range of financial products including personal loans, mortgage loans, investing, credit cards, banking, insurance, estate planning, and small business financing.
Loan amounts
Minimum $1,000; no maximum limit
Loan terms
5, 7, 10, 15 years
Loan rate
The loan rate varies based on the loan type, and there are discounts available for autopay and returning in-school borrowers, as well as the option between fixed or variable rates.
Loan fees
No fees for origination, late payments, insufficient funds, or prepayment.
Ascent Funding
Ascent Funding provides student loans, scholarships, and consumer loans for bootcamp programs, which are career preparation courses offered by some colleges.
Loan amounts
The minimum amount for credit-based loans and undergraduate loans is $2,001, except for Massachusetts residents, who have a minimum of $6,001. The maximum amount for credit-based loans and undergraduate loans is $200,000. The maximum amount for outcomes-based loans is $20,000. The maximum amount for graduate loans is $400,000.
Loan terms
Loan term depends on the type of loan taken out
Loan rate
The loan rate varies based on the loan type, and there are discounts of 0.25% and 1.00% for autopay, as well as the option between fixed or variable rates.
Loan fees
No fees for application, origination, or disbursement, and no penalty for early repayment.
PenFed Credit Union
PenFed Credit Union provides its members with a range of financial products, including student loans, personal loans, auto loans, mortgage and home equity loans, credit cards, bank accounts, and IRAs.
Loan amounts
Minimum $1,000
Loan terms
Loan term depends on type of loan taken out
Loan rate
Loan rate depends on type of loan taken out
Loan fees
Loan fees depend on type of loan taken out
Why trust CNBC Select?
Our mission at CNBC Select is to deliver top-notch service journalism and in-depth consumer advice to our readers, enabling them to make well-informed decisions with their money. Each private student loan lender review we publish is the result of thorough reporting by our team of expert writers and editors, who possess extensive knowledge of student loan products. At CNBC Select, we take pride in our journalistic standards and ethics, and we earn a commission from affiliate partners on many offers and links. However, our content is created without any input from our commercial team or external third parties. To learn more about our methodology and how we select the best student loans with the fastest co-signer release, please refer to our website.
Our methodology
CNBC Select compared private student loans from various national banks, credit unions, online, and non-profit lenders to determine the fastest co-signer release.
We aimed to concentrate on lenders who provide borrowers with the quickest route to freeing a co-signer. Not all lenders offer this option, but for those that do, each requires the borrower to demonstrate they can make consecutive on-time monthly payments. The shortest time frame we discovered was six months. Several lenders offer a co-signer release after 12 or 24 months; for these, we examined other advantages the lender provides, such as catering to different borrower groups like DACA recipients, international students, or credit union seekers. We also prioritized lenders with low rates and fees, as well as multiple loan term and repayment options.
To release a co-signer on a loan, borrowers must meet certain requirements set by their lender, such as a minimum credit score and income level, and submit an application.
The interest rate and monthly payment for private student loans with a fixed-rate APR will remain consistent throughout the loan term. Your private student loan interest rate is determined by your credit score, income, debt-to-income ratio, savings, payment history, and overall financial health. To obtain a private student loan, lenders will perform a hard credit inquiry and require a full application, which may include proof of income, identity verification, and address.
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