Compare lenders that accept cosigners for personal loans | Apply today

Compare lenders that accept cosigners for personal loans

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Having trouble getting a personal loan or qualifying for a good rate on your own? You may be in luck.

Getting your first car or starting college can be more than exciting. It can also be extremely frustrating if you don’t have much credit history. If you can’t afford to make a big purchase outright and your credit is nonexistent or less than perfect, you may be considering a cosigner.

Some of the roadblocks to getting a personal loan can be made more manageable with the addition of a cosigner. You can meet minimum requirements while also potentially getting better rates. A small stumble in your credit history doesn’t have to hold you back.

Credible Personal Loans

Our top pick: Credible

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  • Minimum Loan Amount: $1,000
  • Maximum Loan Amount: $50,000
  • Loan Terms: 2–5 years
  • One simple form
  • Must have good to excellent credit

    What is a cosigner?

    A cosigner is someone who agrees to pay back your loan if you miss payments or default. Rather than relying on just your credit, lenders will also take your cosigner’s financial history and credit into account when reviewing your loan.

    The addition of a cosigner reduces risk for lenders — as long as your cosigner has solid credit. Because a cosigner is intended to act as a guarantee against lost, lenders will review your cosigner’s finances just as thoroughly as they reviewed yours.

    How does a cosigner differ from a guarantor?

    Guarantor is associated with apartments or rentals where only the primary applicant is living at the residence, although it is also used with personal loans on occasion. The main difference is that a cosigner is responsible for late or missing payments as well as loan default, whereas a guarantor is only responsible if you default.

    Is a cosigner different from applying jointly?

    Yes, but both do put responsibility on the person who is applying with you. Joint applicants and cosigners are both fully liable for the loan should you default. However, a joint application implies a level of ownership by the coapplicant over the disbursed funds. A cosigner usually has little to no say in how the loan is used.

    Compare top cosigner loans

    Rates last updated September 25th, 2018

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Max. Loan Amount APR
    LendingClub Personal Loan
    A peer-to-peer lender offering fair rates based on your credit score.
    660
    $40,000
    6.16%–35.89% (fixed)
    FreedomPlus Personal Loans
    Consolidate debt and more with these low-interest loans. Cosigners welcome.
    640
    $35,000
    4.99%–29.99% (fixed)
    OneMain Financial Personal and Auto Loans
    An established online and in-store lender with quick turnaround times. Poor credit is OK.
    Varies
    $30,000
    16.05%–35.99%* (fixed)
    Laurel Road Personal Loans
    Get a personal loan with no application or origination fees and a rate discount for autopay.
    680
    $45,000
    5.5%–11.74% (fixed)

    Compare up to 4 providers

    What are lenders’ conditions for cosigners?

    LenderWhich loans can you apply for with a cosigner?What are the conditions?
    LendingClubAll borrowing reasonsThe lender will consider both of your qualifications, including but not limited to, credit scores, income, debt-to-income (DTI) ratio and credit history. You and the cosigner will be equally responsible for repaying the loan
    OneMain FinancialSecured and unsecured personal loansIf the main applicant relies on another person’s income, that person must be listed as a cosigner and assume responsibility for loan repayments with the main applicant.
    FreedomPlusAll borrowing reasonsThe lender considers two incomes, lowering your debt-to-income ratio and ultimately your assessed risk to the lender. Both applicants agree to apply for joint credit.
    Bank of AmericaAuto refinanceYour cosigner must provide all of the same financial information as you on application, including: W-2s, tax returns, recent pay stubs and bank statements.
    Chase BankAuto loansThe cosigner must provide the same required documentation when applying. The cosigner acknowledges and assumes equal responsibilities.
    Wells Fargo BankAuto loans, home equity financeThe cosigner can be a spouse, partner, relative, family friend or another who shares the loan responsibility.

    Benefits and drawbacks of applying with a cosigner

    Pros

    • Potentially improves your chance of approval
    • May make you eligible for lower interest rates
    Cons

    • If your cosigner’s credit isn’t good enough, you may still be rejected
    • Could affect your cosigner’s credit if you default

    Is it easier to get a loan with a cosigner?

    It depends. A cosigner can be effective because they minimize risk for the lender. If your cosigner doesn’t minimize risk — that is, if they have a poor credit score or a rocky financial history — they may not make the approval process any easier.

    On the other hand, if your cosigner has stellar credit, they may increase the odds of you being accepted for a loan and may even be able to score you a better rate than you would’ve been offered alone.

    Cosigner requirements

    While eligibility varies based on the lender, a few qualifications tend to be universal:

    • Must be 18 years of age or older (19 in Alabama)
    • Must have an established credit history
    • Must demonstrate an ability to repay the loan through regular income
    • Must have a low debt-to-income ratio

    How to apply for a loan with a cosigner

    Applying with a cosigner is very similar to applying by yourself.

    • Compare your options. You can start by reviewing the lenders listed in the table above. Keep in mind that a lender may not accept cosigners for each of its loan types.
    • Prepare your financial documents. Both you and your cosigner should have the documents required by the lender close by to make the process faster. These can include W-2s, bank statements and employment information.
    • Apply together online. If the person who’s agreed to be your cosigner is available, consider having them there with you when you apply online. This way, they can answer any specific application questions that you’re unsure of.

    3 important questions to help make this a smart choice

    Cosigning a loan is a big responsibility. If you don’t make your payments or default on your loan, your cosigner is on the hook for paying back what you borrowed. Before you borrow, be sure to ask some important questions about your financial situation and ability to repay the loan.

    1. What is the loan for? Your cosigner will likely want to know why you’re taking out a loan. Financing a vacation is much different than consolidating your debt, and you’ll need to be clear with your cosigner before you apply.
    2. How much are you borrowing? A small loan is easier to repay than a large loan. A lower amount is more attractive to a cosigner because you’re less likely to face default and if you do, they’ll be on the hook for less money.
    3. How often will payments need to be made? Knowing how often you’ll need to pay down your debt is important. Most lenders require monthly payments and give you the option to make additional payments at no cost. This can impact your cosigner since they’ll have to pay if you don’t, so be sure you can make regular payments.

    What a cosigner means for different loan types

    The type of loan you’re considering will have different implications for cosigners when you borrow. Usually, this is based on the amount you need to borrow, the terms and the loan purpose.

    • Personal loans. When a person cosigns with you for a personal loan, they assume liability for the loan but aren’t entitled to any of the funds. Some people may not be willing to put their name on the line for a personal loan.
    • Auto loans. The benefits as a cosigner for an auto loan are limited. If they’re not listed on the title, they don’t have any ownership. Being listed on the title makes the individual a joint applicant, not a cosigner.
    • Student loans. Cosigners are common on student loans because parents often agree to be legally responsible for their child’s loan payments. Since young students may not have established credit history, a parent cosigner can help them borrow the amount they need to pay for their education.
    • Mortgages. Like an auto loan, unless the cosigner is listed on the property title, they don’t own the property. If you default on your mortgage, the property is security for the loan. The cosigner isn’t transferred any type of ownership.
    • Business loans. For business loans — especially for riskier businesses — cosigners may be asked to provide collateral. The cosigner doesn’t hold any ownership of the business but still risks losing their collateral if you default.

    At the end of the day, a cosigner provides backup in case you’re unable to pay the loan, but they don’t have any benefits from assuming that type of risk. While getting a cosigner can be a handy tool if you can’t qualify by yourself, you need to be sure you’re able to handle what you borrow before asking someone to risk their finances on your loan.

    Compare cosigner loans now

    Bottom line

    There are attractive benefits when it comes to applying for a loan with a cosigner. Finding a provider that meets your needs and allows cosigners can potentially result in easier acceptance and a better interest rate.

    However, it’s important to for you and your cosigner to discuss the terms of the loan before applying. This can help you quickly narrow down your options to loans you could qualify for and what both parties should expect when making a legal agreement.

    Frequently asked questions about cosigners

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