Will Cosigning a Student Loan Make Buying a House Harder? The Facts Earnest Blog | Earnest

Will Cosigning a Student Loan Make Buying a House Harder? The Facts

By Authors at Earnest | Published on October 21, 2025

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When the only thing standing between a student and their education is tuition money, it’s hard to say “no” to becoming a cosigner. But cosigning a student loan isn’t right for everyone. If you’re trying to buy a home or take out another loan, cosigning could make it harder for you to get the money you need. Here’s what you need to know.

Key takeaways

Will cosigning a student loan affect my buying a house?

There’s no guarantee that cosigning a student loan will affect your ability to finance home buying through a mortgage lender –– but it could. That’s because, when you cosign a student loan, you’re effectively adding to your debt profile. Even though you are not the primary borrower, you are legally responsible for repaying the debt in the event the borrower cannot pay. If you apply for a mortgage, this additional debt may make you appear riskier to lenders, which can affect your ability to qualify for a loan. You could also be impacted by payments missed by the primary borrower, which will negatively affect your credit score.

If you do cosign a loan, it’s wise to keep in close contact with the borrower to make sure they’re keeping up with their repayment plan to pay down their student debt. It’s much better to catch missteps early on than to find out about them when your mortgage application has been denied on account of a loan you cosigned several years ago.

Will cosigning a student loan affect my credit?

When the primary borrower applies for a loan and lists you as a cosigner, it will trigger a hard credit check for both of you. Hard credit inquiries will share information about other debt you may have—such as a car loan—that can remain on your credit report for up to two years. Hard inquiries don’t usually cause a dramatic change in your credit score, but you may notice your score decrease a few points temporarily as a result. This is because a credit check implies that you’re seeking access to funding and may be increasing your debt.

A hard credit check is different from a soft credit check, which won’t impact your score. A soft credit check is what happens when you check your interest rate for student loans, for example, without actually submitting an application. These inquiries are generally for reasons other than underwriting a loan.

After you’ve cosigned, how the primary borrower handles the loan will also affect your credit. If the borrower misses a monthly payment, makes a late payment, or defaults on the loan, you’ll be on the hook for the balance. Your score could decrease significantly if you don’t choose to make student loan payments on their behalf.

Pros and cons of cosigning a student loan

Trying to decide whether you should cosign a student loan? Consider these pros and cons.

Pros

Help a loved one get an education

As a cosigner, you’re essentially guaranteeing to the lender that the debt will be paid back. This makes the borrower much less risky to the lender and greatly improves the odds that they’re approved for the loan. If the student has maxed out their federal loans, scholarships, and other financial aid, a private student loan may be the only way they can afford an education at the school of their choice.

Safeguard the borrower from excessive debt

Student borrowers rarely have good credit or a steady income. So, even if they are approved without a cosigner, they’re unlikely to qualify for a lender’s best rates on their own. When you agree to cosign a student loan, the rate will be based on your credit, not the primary borrower’s. And even a slight improvement in interest rate can save a borrower hundreds –– even thousands –– over the life of the loan. Try Earnest’s student loan calculator to see how a slight interest rate decrease can save you money over time.

Diversify your credit profile

About 10 percent of your overall FICO score is determined by credit diversity, which refers to the types of credit in your profile (credit card debt, car loans, student loans, etc). The more diverse they are, the more it proves that you can manage multiple types of debt. Not only could this help your credit score, but it may also make you look more appealing to lenders, who look for credit diversity when they’re evaluating a borrower.

Lengthen credit history

About 15 percent of your overall credit score has to do with credit history –– as in, the age of the accounts you have open. Generally, paying off student loans can take anywhere from 10 to 30 years. If this account remains in good standing, it can help increase your score over that time by extending your credit history.

Cons

May hurt your credit

Because you’re associated with the debt taken out by the primary borrower, any missed payment can hurt your credit score. And any negative mark on your credit can hamper your ability to open other lines of credit, qualify for low rates, or even move homes. Even if you believe the cosigner is a trustworthy borrower, there’s always a chance they run into a situation where they can’t make payments. If that happens, you’ll be forced to choose between making payments for the primary borrower or letting your credit decline.

You’re legally responsible to pay back the loan if they can’t pay

Missing a single payment is one thing, but what happens if the borrower can’t make payments for the long term? There’s no way around it: For as long as they can’t make payments, you’re responsible for the debt. And in the event the loan goes into default, the loan balance becomes due immediately, and you could be facing collections agencies or even legal consequences down the line.

It can make it harder to open other lines of credit

Cosigning a student loan can make new loans, like a mortgage, more difficult to get approved for. Adding debt to your credit profile can increase what’s known as your DTI ( debt-to-income ratio). This is a ratio of how much you earn compared to how much you owe debtors. To lenders, debt-to-income ratio is a key indicator of someone’s ability to manage debt. In general, it’s a good idea to keep your DTI below 30% if you’re trying to qualify for other lines of credit. If this student loan debt is significant, cosigning may put you over that threshold, and out of range of a lender’s best rates.

Who can cosign student loans?

Cosigners don’t have to be family members of the primary borrower. Generally, to meet eligibility requirements, a cosigner can be anyone who is a U.S. resident or citizen, has a good credit score ( usually above 650), and is over the age of majority in their state (usually 18-21).

Only one person needs to cosign a loan. So, if you and your spouse are considering cosigning a loan, you should theoretically choose which of you has the highest credit score so that the student you’re helping can access a lower interest rate.

Can I be released from a student loan?

Some student loan companies have a cosigner release function built into the loan terms, which enables qualifying borrowers to apply to have their cosigner removed from their loan after a period of time. Usually, this works when the primary borrower has made a certain number of on-time payments and/or achieved a certain credit score.

While not all companies offer this option, you can get released from a loan in practice by asking the primary borrower to refinance without you as a cosigner. This will only work if the borrower is in a position to apply for refinancing without a cosigner—or if they have another cosigner they can ask—so it’s not always crucial to depend on a cosigner release option in the loan terms.

Do all student loans require cosigners?

Most students have little to no credit history and aren’t able to secure private student loans or personal loans with favorable terms without the help of a cosigner. However, there are federal student loan options available that don’t require cosigners.

In most cases, you should maximize federal student loans available to you before taking out private student loan debt. The federal government has many protections for student and parent borrowers that make student loan repayment easier and more affordable regardless of employment or monthly income. This also helps protect parents and other loved ones from cosigning loan applications when they’re not equipped to take on monthly debt payments.

Whether you’re seeking Direct loans as a student or Parent PLUS loans as a parent or guardian, the first thing you should do is fill out the FAFSA form. This will assess your family’s financial situation and determine whether you may be eligible for grant aid that doesn’t need to be paid back, or subsidized loans that decrease the amount of interest the student needs to pay.

Alternatives to cosigning a student loan

If you’ve maxed out loans from the federal government and it’s not enough, there are other ways to finance education without cosigning a loan. Here are a few.

See how much you could save with Earnest

Though Earnest doesn’t have a student loan cosigner release option, borrowers in good standing are allowed to refinance every six months, which is an easy way to release a cosigner while potentially securing a lower rate.

Are you ready to cosign a student loan? Find how much you could save in interest with a student loan from Earnest. Our rate calculator is fast, free, and it won’t affect your credit score.