Urgent College Question!?
If I opened a checking account with Bank of America (or any bank), will they help me get a loan for my college education without needing a cosigner?
Unfortunately, the answer is “no”.
Well – perhaps with one exception. If you opened an account with $10,000 or $25,000 in it, the bank might decide that you have sufficient assets to pay off the loan, and who knows, they might lend you the money. On the other hand, if you had that kind of money available to you, you wouldn’t be looking for a loan.
You have to keep in mind WHY a lender asks for a cosigner. It’s really not all that hard to understand.
A lender will only lend money when they are able to gather sufficient evidence to support the belief that the applicant will pay them back.
There are only 2 pieces of information that a lender can use to predict your future behavior.
One is how much income you have. You might have the best intentions to pay back your loan, but if you have no income, there is no way that you will be able to pay.
Obviously, you’re falling short in that area if you’re going to apply for a large loan right now.
The other factor (and usually more important) is your credit history. Your credit history is like your “references”. It consists of nothing more than a list of loans that you’re taken out and paid back in the past. If you’ve taken a loan and paid it back on time, you have a “good” reference – if you’ve taken a loan and paid it back with a few hiccups along the way, you have a “mediocre” reference. If you’ve taken a loan and fallen way behind, or gone into default, or filed bankruptcy to try to avoid paying it, then you have a “bad” reference.
Lenders are like employers – the more references you have, the more confident they are that they can see the “general picture” of your borrowing habits. It’s always better to have several references than just one or two.
Yes, banks realize that most college students don’t have extensive income and they don’t have extensive credit histories. It doesn’t mean that they don’t realize that makes it hard for you to find a loan, but they’re still running a business. They just don’t have enough information about you to make it possible for them to lend you a large sum of money for 5 or 10 years.
The cosigner requirement is a lender’s way of telling you gently that you don’t qualify for the loan. If you can find someone else who does qualify, and they’re willing to step up and take full responsibility for the loan, then the lender feels confident enough to make the loan.
Cosigning is ALWAYS a bad idea, though. If you’re ever asked, no matter how much you care about that person, I’d strongly recommend that you politely decline.
So, no. Simply having $200 in a Bank of American checking account doesn’t give Bank of America any more confidence that you’ll be willing or able to pay back a $20,000 loan in 10 years.
Sorry to be the bearer of bad news.
