How Getting Married Affects Your Student Loans – Getting married is a big step in life that can have a huge impact on a lot of things, including your fiancés, especially if you have a student loan.
Most couples who intend to effectively plan their financial future needs to be aware of how getting married affect student loans. Marriage can affect forgiveness programs, repayment alternatives and even tax implications, depending on the type of loan and the lender.
If you or your spouse has a federal or private student loan, it can be affected when you get married. Whether you plan to get married or you already are. It is important to understand how marriage can influence your student loan. This article contains explanatory information on how getting Married Affects Your Student Loans.
How Getting Married Affects Your Student Loans
There are several ways your student loan can be affected after getting married; here are some of them;
You May Not Qualify For Interest Deduction
Most lender offer student loan interest deduction for borrowers who are single but once you get married; it becomes a different ball game. If you and your spouse earn above $185,000, you might not qualify for deduction of interest on your student loan.
Your Monthly Payment Can Become Higher
If you have a federal student loan, it is most likely that your monthly payment to be high once you get married. For instance, if you and you spouse file taxes jointly. And are both enrolled in an income-driven repayment plan, it could lead to higher payment of your loan. On the other hand, you can lower your monthly payment if you file your tax separately.
Your Spouse Payment Can Affect Your Finances
In a situation where you were you spouse co-signer when applying for a student loan. Or refinancing a loan, you are deemed responsible for paying back the loan if they are unable to meet up with payment.
Since you are a co-signer on your partner’s loan, it can affect your chances qualifying for a loan or taking a new credit. In some cases, if your spouse defaults on his/her student loan when you get married, some lenders may come after your assets.
You May Be Responsible For Your Spouse Debt after Divorce
If you and your partner were to divorce at some point in time, you may be required to pay off the outstanding loan they has. While individuals are responsible for the loans they took out.
It can become the responsibility of a spouse is they co-sign the student loan. The only way you can escape from being held responsible for your spouse debt after a divorce if by obtaining a co-signer release from the lender.
Will My Spouse Student Loan Affect My Eligibility To Take A New Loan?
Your spouse’s student loans may affect your eligibility to take a new loan from different lenders. This is mostly based on your combined financial situation. When determining whether or not a borrower can afford to repay a new loan, most lenders often consider the income, debts, and credit scores of both partners.
Significant student loan debt from your spouse may raise your overall debt-to-income ratio. This may make it harder for you to qualify for new loans or even get good interest rates.
It is, however, crucial to remember that the effect of your spouse’s student loan can differ depending on the lender. And the type of loan you intend to apply for. For instance, when applying for a mortgage, lenders usually consider the financial circumstances of both partners. While for personal loans, they might just check the creditworthiness of the main person applying for the loan.
In addition, if you and your spouse are applying jointly for a loan. Your credit scores and financial histories will be taken into account to determine your eligibility. Depending on the lender’s overall assessment, this could either increase or decrease your chances of being approved for the loan.
FAQs
Will my spouse’s student loans affect my credit score?
The answer to the question depends on whether your partner was a co-signer or not. Your spouse loan will not have a direct effect on your credit score if you did not co-sign the loan at the time of application or you are financially linked in one way or the other.
How can we manage student loans as a couple?
Managing the home after marriage can be daunting for both couples. And an effective way to manage your student loan is by coming up with a joint financial plan. This plan should include your budget towards the loan payments. You can also explore several refinancing options and income-driven repayment plans.
If I get married, will my student loan be joined with my spouse’s?
No, your student loan will carry your name even after getting married, except if you and your spouse refinance the loan together. That is the only way the loan can become joint.
