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Personal loans can be a huge help. Whether you need to finance a pet’s surgery or consolidate debt, they can enable you to reach your goals. But what if you can’t get approved for one?
If you’re having trouble getting approved for a personal loan, getting a cosigner can increase your chances of getting a loan and receiving favorable loan terms.
Here’s what you should know about getting a personal loan with a cosigner and what lenders accept them:
- Lenders that offer personal loans with cosigners
- Getting a cosigner for a personal loan
- How much you can save with a cosigner
- What to consider before getting a cosigner on a personal loan
- Applying for a personal loan with a cosigner
Lenders that offer personal loans with cosigners
Not all low-interest personal loan lenders allow you to add a cosigner to your physical or online application, but there are some that do. Here are seven lenders that allow cosigners on their applications. Keep in mind that some of the lenders in the following table are Credible partners.
|Lender||Fixed rates from (APR)||Loan amounts|
|7.99% - 29.99% APR||$10,000 to $50,000|
|Check with lender||$5,000 to $45,000
(depending on loan type)
|9.57% - 35.99% APR||$1,000 to $40,000|
|7.99% - 24.99% APR with autopay||$5,000 to $100,000|
|18.0% - 35.99% APR||$1,500 to $20,000|
|8.49% - 17.99% APR||$600 to $50,000
(depending on loan term)
|8.99% - 25.81% APR10||$5,000 to $100,000|
|Smaller banks and credit unions||Varies||Varies|
Min. credit score required without a cosigner: Does not disclose
With Achieve, the lowest rates they have available are usually only offered when you add a creditworthy cosigner to your application.
2. Laurel Road
Min. credit score required without a cosigner: 660
If you don’t meet Laurel Road’s underwriting criteria, adding a cosigner to your application can increase your chances of getting approved. Laurel Road does a soft credit pull, which allows you to check your loan eligibility without impacting your credit score.
Min. credit score required without a cosigner: 600
Generally, LendingClub offers loans to people with high credit scores, low debt-to-income ratios, and a credit report that shows a long credit history with a diverse mix of credit lines. If you don’t meet these criteria, LendingClub does allow you to submit a joint application, increasing your chances of getting approved for a loan.
Min. credit score required without a cosigner: 700
LightStream is an online lender that offers many different types of personal loans, including both unsecured loans. They do allow cosigners, which may help you qualify for a loan without having to put up collateral.
5. OneMain Financial
Min. credit score required without a cosigner: None
OneMain Financial caters to consumers with poor credit. They do allow joint applications, helping you qualify for a better rate than you would on your own.
Min. credit score required without a cosigner: 700
If you need a small personal loan, PenFed could be a good option — you can borrow as little as $600 up to $50,000 for a wide range of loan purposes. You also have the option to apply with a cosigner, which could qualify you for lower interest rates.
Keep in mind that while you don’t have to be a PenFed member to apply, you’ll have to join the credit union if you are approved and want to accept the loan.
Min. credit score required without a cosigner: Does not disclose
SoFi generally offers personal loans to people with good to excellent credit and might be a good choice if you’re looking to consolidate debt (like credit card debt) or borrow for home improvement projects. Their personal loans are unsecured, meaning you don’t have to worry about providing collateral. They also allow cosigners, which could improve your chances of qualifying.
8. Smaller banks and credit unions
Min. credit score required without a cosigner: Varies
While most major banks no longer offer personal loans, smaller banks and credit unions still do. And many of them allow you to add a cosigner to your application, helping you qualify for a lower rate. It’s a good idea to stop in at your local bank or credit union to see what rates they can offer you. If you already have a bank account with them, for example, you might be able to get a better rate.
Getting a cosigner for a personal loan
If you want to take out a personal loan, you typically need regular income and a good to excellent credit score. If you don’t have those things, it can be difficult to find a lender who will approve you. Or if you do qualify for a loan, you could get stuck with a high interest rate.
That’s where a cosigner can help. A cosigner is someone with good credit and a stable income, usually a family member or close friend. The cosigner acts as a guarantor on the loan and takes on joint responsibility for its repayment. If you can’t make your monthly payments, the cosigner is responsible for them. Because having a cosigner lessens the risk to the lender, they’re more likely to issue you a loan and offer you better loan terms.
How much you can save with a cosigner
The savings of applying for a loan with a cosigner can be significant. For example, let’s say you applied for — and qualified on your own — a $10,000, five-year loan. Because of your credit, the lender gave you a 15% interest rate. Over the length of your repayment, you’d pay a total cost of $14,273.
But let’s say you had a cosigner, and, thanks to their help, you qualified for a 12% interest rate. Over the course of five years, you’d repay just $13,346. Having a cosigner on the loan would help you save close to $1,000.
Before you borrow, estimate how much you’ll pay for a loan using our personal loan calculator below.
Enter your loan information to calculate how much you could pay
With a $ loan, you will pay $ monthly and a total of $ in interest over the life of your loan. You will pay a total of $ over the life of the loan.
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What to consider before getting a cosigner on a personal loan
If you have poor or fair credit, applying for a personal loan with a cosigner can increase your approval odds. Having a cosigner might also get you a better interest rate than you’d get on your own. However, here are a couple of important points to understand before asking someone to cosign a loan:
- You can damage relationships. If you fall behind on your monthly payments, you’ll leave your cosigner in a difficult position. They’ll have to make the loan payments instead — even if they can’t afford to do so — or risk their own credit being ruined (and no one wants bad credit). If that happens, you can bet that your personal relationship with that person can suffer.
- Your cosigner will always be responsible for the loan. It’s difficult to get a cosigner removed from a personal loan after the loan is disbursed. This means your cosigner could be stuck being responsible for the debt for years until it’s paid off. This is why it’s so important that both you and your potential cosigner fully understand the risks and benefits of cosigning a loan before applying for a loan.
- Build your credit. If you can wait to take out a loan, it could be a good idea to spend some time improving your credit before you apply. This way, you’ll have an easier time getting approved. There are several potential ways to build your credit — such as making on-time payments on all of your bills, paying down credit card balances, and avoiding new loans when possible.
- Get a credit-builder loan. These loans are specifically designed to help borrowers build their credit and are usually easy to qualify for — even if you have a short credit history or no credit at all. When you take out a credit-builder loan, you’ll make payments like any installment loan. The lender will deposit these payments in a dedicated savings account. At the end of the repayment term, you’ll get the balance of this account back minus any interest or fees.
- Apply with your bank or credit union. In some cases, your bank or credit union might offer you a lower interest rate on a loan even if you don’t have a cosigner. If you already have an account somewhere, ask them if there are any loyalty discounts available to you as an existing customer or member.
Applying for a personal loan with a cosigner
If you’re ready to apply for a personal loan with a cosigner, follow these four steps:
- Find a cosigner. A cosigner can be anyone with good credit (such as a parent, another relative, or a trusted friend) who is willing to share responsibility for the loan. Make sure to create a plan with your cosigner that covers when you’ll make the loan payments and what you’ll do if you can’t make a payment — this can help put your cosigner’s mind at ease and prevent you from straining your relationship.
- Compare lenders and pick a loan option. Be sure to compare as many lenders as possible to find the right loan for you. Consider not only interest rates but also repayment terms, any fees charged by the lender, and eligibility requirements. Also double-check if the lender accepts cosigners — not all personal loan lenders do. After comparing lenders, choose the loan option that best suits your needs.
- Complete the application. Once you’ve picked a lender, you’ll need to fill out a full application and submit any required documentation, such as tax returns or pay stubs. Your cosigner will need to provide their information on the application as well.
- Get your funds. If you’re approved, the lender will have you sign for the loan so the funds can be disbursed to you. The time to fund for a personal loan is usually about one week — though some lenders will fund loans as soon as the same or next business day after approval.
If a personal loan seems like the right fit for your situation, remember to shop around and consider your options from as many lenders as you can to find the right loan for you.
Credible makes this easy: You can compare your prequalified rates from multiple lenders in two minutes — though keep in mind that you won’t be able to get a personal loan with a cosigner through Credible.
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You can use Credible to compare rates from multiple lenders in 2 minutes. Just keep in mind, you won’t be able to get a personal loan with a cosigner through Credible.
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About Rates and Terms: Rates for personal loans provided by lenders on the Credible platform range between 4.60%-35.99% APR with terms from 12 to 84 months. Rates presented include lender discounts for enrolling in autopay and loyalty programs, where applicable. Actual rates may be different from the rates advertised and/or shown and will be based on the lender’s eligibility criteria, which include factors such as credit score, loan amount, loan term, credit usage and history, and vary based on loan purpose. The lowest rates available typically require excellent credit, and for some lenders, may be reserved for specific loan purposes and/or shorter loan terms. The origination fee charged by the lenders on our platform ranges from 0% to 10%. Each lender has their own qualification criteria with respect to their autopay and loyalty discounts (e.g., some lenders require the borrower to elect autopay prior to loan funding in order to qualify for the autopay discount). All rates are determined by the lender and must be agreed upon between the borrower and the borrower’s chosen lender. For a loan of $10,000 with a three year repayment period, an interest rate of 7.99%, a $350 origination fee and an APR of 11.51%, the borrower will receive $9,650 at the time of loan funding and will make 36 monthly payments of $313.32. Assuming all on-time payments, and full performance of all terms and conditions of the loan contract and any discount programs enrolled in included in the APR/interest rate throughout the life of the loan, the borrower will pay a total of $11,279.43. As of March 12, 2019, none of the lenders on our platform require a down payment nor do they charge any prepayment penalties.