It can be difficult to get approved for a personal loan, especially if you don’t have the best credit. That’s where a cosigner comes in. A cosigner may help you access cash that you may not be able to on your own.
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With a cosigner, you can qualify for a loan with better rates and terms. Since this individualagrees to step in and take financial responsibility if you fail to make your payments, a cosigner loan can be risky. Therefore, it's important to be honest and communicate with your cosigner right off the bat. To help you find the right cosigner loan and obtain the funding you may need, our team of financial experts reviewed and ranked more than 30 online lenders.
Direct payments for debt consolidations: If you take out a debt consolidation loan, FreedomPlus will pay your creditors so you don’t have to.
Payment flexibility: You can choose your preferred payment date before you sign your loan agreement and even change it afterwards if you’d like.
Chance to prequalify: If you’d like to check your offers without any affect to your credit, you can prequalify on the FreedomPlus website.
Origination fees: FreedomPlus charges origination fees between 1.99% and 4.99% of the total loan amount.
High minimum loan amounts: The smallest loan you can take out is worth $7,500, which can be an issue if you only have a small expense.
Potentially high rates: If you and your cosigner don't have the best credit scores, you may have to accept a rate as high as 29.99%.
FreedomPlus accepts cosigners and sends payments directly to third-party creditors for debt consolidation. If your goal is to pay off high-interest credit card debt, FreedomPlus should be on your radar. You’ll be able to streamline the payoff process and potentially lower your interest costs.
FreedomPlus loans go from $7,500 to $50,000 with terms of 2 to 5 years. Interest rates range from 7.99% to 29.99%. The qualification requirements are a credit score of at least 600 and a debt-to-income ratio of no more than 45%.
FreedomPlus personal loans can be a good option if you would like to apply for a debt consolidation loan with a cosigner.
High maximum amount: You may be able to borrow up to $100,000, depending on your credit and your cosigners credit.
Low rates: As long as your cosigner strengthens your application, you can qualify for a low rate, which can save you hundreds or even thousands of dollars on your loan.
No fees: LightStream doesn’t charge any fees, including origination fees, late fees, and repayment fees.
No prequalification tool: You won’t be able to check your offers from LightStream without hurting your credit.
High minimum loan amount: If you only want to borrow a few hundred or thousand dollars, you may find the minimum loan amount of $5,000 a bit too high.
Established credit history required: LightStream approves borrowers with at least a few years of credit under their belt.
A LightStream personal loan may be the way to go if you want to borrow a lot of money and would like to apply with a cosigner. Its loans go up to $100,000, making them ideal for home improvement projects, medical bills, or other large expenses.
LightStream loans range from $5,000 to $100,000 with terms of 2 to 7 years and rates between 4.99% to 19.99%. The lender requires a minimum credit score of 660 and at least several years of credit with a good payment history.
If you have a hefty upcoming expense, you may be able to cover it with a cosigner loan from LightStream.
Fast funding: You may be able to collect your funds via direct deposit the same day you apply.
Branch access: If you feel more comfortable applying for a loan and managing a loan in person, you’ll be able to do so at a OneMain Financial branch.
Seven-day cancellation policy: OneMain Financial allows you to cancel your loan within 7 days should you decide it’s not right for you.
No autopay discount: Unlike many other lenders, OneMain Financial doesn’t offer a rate discount if you sign up for automatic payments.
Origination fees: You may be on the hook for an origination fee of 1% to 10% of the total loan amount or a flat fee of $25 to $500, depending on where you live.
High starting interest rate: Even if you have good credit, you may have to settle for a higher-than-average interest rate.
OneMain Financial offers personal loans with cosigners and fast funding. It’s one of the few lenders that can fund your loan the same day you apply. If you can’t wait long for the money, OneMain Financial is a solid pick.
OneMain Financial loans range from $1,500 to $20,000 with repayment terms of 2 to 5 years and interest rates between 18.00% to 35.99%. While the lender doesn’t reveal any hard credit requirements, it does state that it uses a proprietary underwriting system to review your credit information and focuses on your ability to repay your loan.
OneMain Financial is best if you’re in search of a flexible cosigner loan with same-day funding.
Member-only perks: Upon approval, you can enjoy a variety of extra benefits that are exclusive to SoFi members.
Large loan amounts: SoFi will lend up to $100,000 to borrowers who qualify.
Unemployment protection: If you get laid off, you may be able to pause your payments and receive some support with your job search.
High eligibility requirements: Even though you can apply with a cosigner, SoFi will look for good credit and a strong monthly cash flow.
May have to wait for funding: It can take a few days to receive your funds.
High minimum loan amount: SoFi loans start at $5,000, which can be an issue if you only have a small expense.
If you’re looking for a cosigner loan that offers more than just funding, SoFi might meet your needs. The lender prides itself on member-only perks like interest rate discounts, career coaching, and events, like happy hours and dinners with other members.
SoFi personal loans range from $5,000 to $100,000 with repayment terms of 2 to 7 years and interest rates between 6.99% to 21.78%. You need a credit score of at least 680 and must be currently employed or have a job offer that starts within 90 days.
If you’d like a cosigner loan that comes with a variety of perks, a SoFi loan can be a solid choice.
Minimal fees: PenFed doesn’t charge origination fees and prepayment fees, which can increase your overall cost of borrowing.
Prequalification tool: Since PenFed allows you to prequalify, you can check your loan offers without hurting your credit.
Mobile app available: You can manage your PenFed cosigner loan through an intuitive mobile app.
Must join PenFed: Even though you can check your loan offers without joining, you must become a PenFed member to move forward with one.
No autopay discount: With PenFed, you won’t save money if you enroll in automatic payments.
Limited payment date flexibility: PenFed does not offer an option to choose or change your payment date.
If you want a cosigner loan that doesn’t require you to pay many fees on top of interest, PenFed may be a solid pick. You won’t have to pay any origination fees and prepayment fees, which are often charged by other lenders.
PenFed offers personal loans between $600 and $50,000 with repayment terms that range from 1 to 5 years. Interest rates are from 4.99 to 17.99%. While the lender does not disclose any minimum credit score requirements, you do have to join PenFed to take out a loan. This will require you to open a savings account with a minimum $5 deposit.
If you don’t mind joining PenFed and would like to save on fees, a cosigner loan from PenFed might make sense.
How to Choose the Best Personal Loan With a Cosigner?
There are a number of important factors to consider when you search for the best personal loans with a cosigner. Our experts used the following parameters to rank the lenders.
Loan Features: Loan features refer to loan terms, loan amounts, and loan use limitations. While some personal loans that allow cosigners offer large loan amounts and are flexible with the terms and what you can do with the proceeds, others come with stringent criteria, limited loan terms, and use restrictions.
Interest rates and fees: Ideally, you’d find a cosigner personal loan that offers low interest rates. After all, the goal of using a cosigner to obtain a loan is to qualify for more favorable rates and terms. Minimal to no fees are preferred as well.
Application process: Even though the application process for a cosigner loan is longer than it would be if you were to apply on your loan, we looked for easy online applications and pre-qualification tools, which can allow you to check your offers without any impact to your credit.
Qualification process: If you’re in search of a personal loan with a cosigner, there’s a good chance you’re looking for lenient minimum credit score and income requirements. That’s why we made it a priority to find lenders who are flexible in their eligibility criteria.
Customer support: At some point in time, you may need to reach a lender for help, especially if your loan comes with a longer term. Therefore, access to your lender through various channels, including phone, email, live chat, and social media is ideal.
Online user reviews: Reviews on reputable third-party review sites like Trustpilot and Better Business Bureau gave us a good idea of each lender’s reputation without any bias.
Perks and Bonuses: Some cosigner loans come with added perks and bonuses like free credit score monitoring, hardship assistance, and repayment flexibility.
Best Personal Loan With a Cosigner - Feature Comparison
Min. credit score
7.99% to 29.99%
$7,500 to $50,000
Co-Borrower vs. Cosigner: What’s the Difference
While the terms cosigner and co-borrower often get used interchangeably, there are key differences between them. A cosigner agrees to repay the loan in the event the primary borrower defaults on it. However, they don't receive any direct benefit from the funds as the loan is taken out for the sole purpose of the primary borrower.
A co-borrower, on the other hand, takes out the loan with someone else, oftentimes for a shared purpose, like a home improvement project or a vacation, for example. Both borrowers have equal ownership of the loan funds and work together to pay them back.
When is a cosigner a good idea?
There are certain situations in which a cosigner makes sense, including:
Emergency expenses: If life throws you a curveball and you have to repair your car or pay for a medical bill, you might want to find a cosigner so you can take out a personal loan and cover your emergency expenses. This is particularly true if you have bad credit and are unable to get approved on your own.
An expected increase in income: Let’s say you’re a college graduate with a job lined up. If you want to borrow money to furnish your new apartment, a cosigner loan may be a good option. It can bridge the gap between your current low income situation to a future with a steady income where you can afford to make payments on a loan.
Debt consolidation: A personal loan may be a smart choice if you want to consolidate high-interest credit card debt and lock in a rate that’s lower than the rates you’re paying now. It may save you hundreds or even thousands of dollars in interest.
When is a cosigner a bad idea?
Sometimes, a cosigner can do more harm than good. Here’s when you should avoid one.
Unstable income: If you don't have a steady income and believe you might default on your loan, you should forgo a cosigner. You may damage your relationship with them if they have to take over and make your payments.
Other options are available: It’s not a good idea to take out a cosigner loan if there are other ways you can borrow money. If you can tap into your home equity, for example, it’s better to pursue a home equity loan or a home equity line of credit (HELOC) that doesn’t involve anyone else.
The loan proceeds benefit you and the cosigner: Imagine you live with your significant other and want to remodel your kitchen. In this case, you’d be better off asking them to be your co-borrower because the loan would benefit both of you and you can work together to repay it.
How to Get a Personal Loan With a Cosigner
These are the typical steps you’ll need to take to qualify for and apply for a personal loan with a cosigner.
Find the right cosigner: Look for a trusted family member or close friend that you communicate with on a regular basis. This individual should have your best interests in mind and accept that they’ll be liable for the loan if you default.
Shop around and compare options: Do some research and find lenders that offer cosigner loans. Then, compare the interest rates, terms, fees, and perks of all your options. Our list of lenders is a great place to start.
Gather documents: Once you decide on a loan, you’ll need to collect documents like your pay stubs, bank statements, tax forms, and government-issued ID. You may have to ask your cosigner to share their documents so you have them on hand as well.
Fill out an application: Fortunately, most lenders will allow you to apply for a personal loan with a cosigner online. Be sure to fill out your application carefully and double check your work to avoid delays with approval and funding.
Wait for approval: Depending on the lender, you can expect a decision the same day you apply, within 24 hours, or in a few business days. They’ll likely notify you via phone or email.
Sign the agreement: Upon approval, you’ll receive a loan agreement. Review it closely and ask your lender for clarity if something doesn’t make sense. Then, sign on the dotted line and you’ll be good to go.
What Happens If You Can’t Pay Back a Cosigned Loan?
If you can’t repay a cosigned loan, your cosigner will be responsible for it and both of your credit scores will take a hit. In a perfect world, they’d cover your payments and there won’t be any hard feelings. The worse case scenario is they’re unable to repay your debt and the lender sues you. Since the consequences of defaulting on a cosigner loan are extreme, do not take one out unless you’re confident you can pay it back.
Tips on Choosing a Cosigner for a Personal Loan
Almost anyone can be a cosigner but that doesn’t mean you should ask Joe Shmo across the street. Here are some pointers to help you find the best cosigner.
Consider who you trust: It’s important that you trust your cosigner and they trust you back. Think about a family member, friend, or even mentor with solid credit and income that might be a good fit.
Have a serious conversation: Once you know who you’d like to be your cosigner, sit down with them and explain your situation. Make sure they know why you need them to cosign, what you plan to do with the loan proceeds, and how you’ll repay what you borrow. It’s also vital that they agree to take over your loan should you fail to make your payments.
Work together: If your potential cosigner accepts the responsibility of cosigning a loan, find a lender and apply with them. This way they are closely involved and there are no unwanted surprises.
Have a plan B: Ideally, you’ll find a cosigner without any issues. But in the event you’re unable to, you’ll need to explore other options. You may have to settle for a loan with higher rates, choose a home equity loan, or simply delay your purchase and save up the cash.
Secure the Funding You Need with a Cosigner
If you can’t get approved for a personal loan with favorable rates and terms because of your credit or income, a cosigner can make your life easier. Just make sure they’re someone you can trust and you feel confident you’ll be able to repay your loan. Otherwise, you may ruin your relationship with them and damage your credit.
Frequently Asked Questions(FAQ)
Can I get a personal loan with a cosigner?
As long as you can find a cosigner with a high credit score
and sufficient income, you may be able to take out a cosigner loan. Since there
are many lenders that allow cosigners, you’ll need to shop around, compare your
options, and find the right one for your unique situation.
Who gets credit on a loan with a cosigner?
Your cosigner’s credit will be tied to the loan. Therefore,
if you default on your payments, both your credit score and their credit score
will suffer. Make sure your cosigner understands and accepts this risk. Your
cosigners credit will no longer be affected if they secure a cosigner release.
What is the minimum credit score for a cosigner?
While every lender has their own unique credit requirements
and there is no hard and fast minimum credit score, a cosigner will usually
need credit in the good or excellent range. Typically, lenders look for
cosigner credits scores of 670 or higher.
Is it easier to get a loan with a co-borrower?
A co-borrower has more responsibility than a cosigner
because they are responsible for repaying a loan with another borrower. Since a
loan that involves a co-borrower reassures lenders that there are multiple
sources of income that can go toward repayment, it’s typically easier to get.