Best Personal Loans with Co-Signers Online
For Good & Bad Credit

It could be for a variety of reasons, but you might not qualify for a personal loan on your own. Perhaps it’s because you haven’t always been a responsible borrower, or maybe you just don’t have any credit history to speak of. Fortunately, there’s a way for people in your position to get the funds you seek while also strengthening your overall credit report. If you’d like to learn more about bad credit personal loans with cosigners, here’s everything you need to know.

What Are Bad Credit Loans with Cosigners?

Generally speaking, personal loans with cosigners are designed for people with less-than-desirable credit scores and those who lack a substantial enough online credit history to appease lenders. As the name implies, cosigned loans involve having someone else — usually a friend or family member — also sign a loan application on your behalf.

How Can a Cosigner Help?

By adding a cosigner's income and credit history to your loan application, you’ll drastically increase your odds of qualifying for attractive terms. This is because, when you have someone else sign a loan application with you, the cosigner essentially agrees to take on responsibility for any outstanding balance if you neglect to pay the bill on time. In this way, the cosigner is leveraging their good credit to help you strengthen your own reputation as a borrower. But that’s not all you need to know about cosigned loans.

Pros and Cons of Cosigned Loans

While cosigned loans can seem pretty attractive to inexperienced borrowers, there’s more to the story than meets the eye when it comes to benefits and drawbacks of this type of financial arrangement. Here’s a deeper dive into the pros and cons of cosigned loans.

• Pros
  • You can get a loan even if you have a poor credit score or little credit history.
  • If your cosigner has amazing credit, you could qualify for unbeatable terms.
  • By paying down a cosigned loan on time, your credit score will undoubtedly increase.
• Cons
  • If your cosigner’s credit history isn’t strong enough, you’ll likely still be rejected.
  • You could damage your cosigner’s credit — and your relationship —  if you miss a payment.
  • It can be difficult to remove your cosigner’s name from a loan should you ever choose to do so

Online lenders that allow co-signers

Of all the lenders that offer personal loans for cosigners, Lightstream and FreedomPlus are two of our favorites. Here’s a quick look at each of their standout features and how these two institutions compare to one another when it comes to cosigned loans.

• Lightstream: A division of Suntrust Bank, Lightstream is a lender that has a reputation for only approving cosigners with above-average credit. When reviewing joint applications, Lightstream considers factors including combined income and current debt, and your cosigner must have a minimum credit score of 660. Interest rates with Lightstream range from 3.99% to 16.79% (varies by loan purpose) with loan amounts from $5,000 to $100,000. Repayment terms span from two to 12 years (depending on the loan amount and loan purpose), and funding can be provided the same day it’s approved in many cases.

• FreedomPlus: With roughly 40% of their borrowers using cosigners, joint loans are nothing new to FreedomPlus. This lender grants customers reduced interest rates if they add a cosigner with solid credit. FreedomPlus offers fixed-rate APRs ranging from 4.99% to 29.99% on two- to five-year loans for amounts from $7,500 to $40,000. FreedomPlus will occasionally approve cosigners with scores starting at 640, but borrowers are far more likely to get approved with a credit score of 700 or higher. Funding takes as little as two days, and, depending upon your cosigner’s credit and the amount of the loan, an origination fee of up to 5% might be required.

Cosigned Loans for People with Bad Credit

If your credit history and your credit score leave a lot to be desired, you still have options when it comes to cosigned loans. Among the best ways for people with bad credit to secure a cosigned loan is to apply for one with OneMain Financial. OneMain specializes in working with individuals who want to rebuild their credit reputation with the help of a cosigner. This institution issues loans from $1,500 to $25,000 with repayment terms ranging from one to five years. APRs span from 16.05% to 35.99%, and while OneMain doesn’t require a minimum credit score for cosigners, they almost always insist that applicants visit one of their many branches prior to approval.

» MORE: Loans For People With Bad Credit

 

A Closer Look at Lenders’ Conditions for Cosigners

Not all lenders were created equal, and each has their own set of guidelines when it comes to cosigned loans. In a nutshell, here’s what you need to know about today’s top lenders.

• LendingClub: No restrictions on what loans can and can’t be used for. LendingClub considers credit scores, income, debt, and credit history when approving loans. Both signers are equally responsible for repayment.
• OneMain Financial: Specializes in secured and unsecured personal loans. Primary applicants must report their source of income, and if they depend on someone else for money, that individual must also assume the responsibility of a cosigner.
• FreedomPlus: No restrictions on what loans can and can’t be used for. Both cosigners apply for a joint credit account based on combined income, debt, and assessed creditworthiness.
• Bank of America: Only approves cosigned loans for auto refinancing. Both you and your cosigner are required to provide W-2s, tax returns, recent pay stubs, and bank statements.
• Chase: Only approves cosigned auto loans. Both cosigners must provide the same documentation during the application process. The cosigner assumes equal responsibilities for repayment
• Wells Fargo: Specializes in auto and home-equity finance loans. Cosigners share equal responsibility for a loan.

Can I get a personal loan with a co-signer?

Some lenders allow applicants to apply with a co-signer. A co-signer is usually a close friend, family member, spouse, or similar who applies for a loan with you. Both parties assume some kind of responsibility for the loan. Ideally, a co-signer will be a well-qualified applicant, so their credit score and income will boost your chance of approval. When you apply for a loan with a co-signer, it’s important to recognize their financial obligation to the loan. In the event you are unable to make a payment(s), you should communicate with the co-signer as a sign of respect. Defaulting on the loan and paying off the loan can impact both the primary applicant's and the co-signer’s credit score. 

Do private loans allow co-signers?

Some private loans allow co-signers. Whether a co-signer is permissible really depends on the lender or backer of the loan. Private loans are loans provided by credit unions, banks, online lenders, and other private sources. Some loans, such as student loans, are provided by the federal government; these are not private loans. 

What are my chances of getting a loan with a co-signer?

Your chances of getting a loan, with or without a co-signer, can depend on a number of factors. Ideally, applying for a loan with a co-signer will increase your chance of approval, but it’s not a black-and-white answer. The co-signer should be a well-qualified applicant to maximize their impact on your chance of approval, especially if you have less than perfect credit. There’s also the reverse role of a co-signer, where a well-qualified applicant can apply for a loan with a co-signer trying to build credit. In either situation, the applicants should complement each other to increase the chance of approval. 

Can a co-signer already have a loan?

Co-signers can have existing loan(s). Most lenders will evaluate the co-signer based on the same or similar requirements as the primary applicant. These requirements can include factors such as credit score or debt-to-income ratio. The debt-to-income ratio calculates an applicant's current payments or debts by their gross income. Applicants need to be within a certain ratio to meet the requirements set forth by the lender. 

Whose credit score is used with a co-signer?

The credit score of the primary applicant and the co-signer can be used. The co-signer and primary applicant’s credit scores should complement each other to increase the chance of approval.

Does a co-signer have to show proof of income?

Sometimes, a lender will request supporting documentation, such as proof of income. While you may apply for a loan jointly, the lender may request different supporting documentation from the primary applicant and co-signer. The co-signer and primary applicant should have supporting documentation available. During the application process, it’s important to submit accurate information that matches the supporting documentation. This can help the loan process go smoother, especially if the lender requests supporting documentation. 

What credit score does a co-signer need for a personal loan?

Ideally, co-signers should have good to excellent credit scores. Good FICO scores are classified as 670-739 and excellent FICO scores are classified as 800-850. In some cases, applicants with good or excellent credit scores may apply with a co-signer who’s trying to build credit. Ideally, one applicant, usually the primary applicant, should be a well-qualified applicant. Some lenders may have less strict requirements though.

Does co-signing a loan hurt my credit score?

When you co-sign a loan, it’s generally reported to your credit, therefore, it can impact your credit. A co-signer is responsible for ensuring the loan is repaid in the event the primary applicant defaults on payments. Before co-signing a loan you should consider your future financing needs as well as the pros and cons. If you plan to take a loan soon, you may want to limit your credit utilization. Co-signing is a generous act that deserves intentional actions and thoughts before committing. 

Can you be denied a personal loan with a co-signer?

A co-signer is not a sure way to guarantee that you will return an offer. It is possible to get denied for a loan, even with a co-signer. Reasons you might get denied include the co-signer not meeting the requirements of the lender. Similar to a primary applicant, co-signers need to meet requirements set forth by the lender. If you qualify for the loan without the co-signer, the lender might attempt to make contact with you before denying the loan completely. If you get denied for a loan, the lender should be able to provide insight so you can determine if it makes sense to re-apply. 

Can I get a personal loan with a 500 credit score with a co-signer?

If you have bad credit, a co-signer can increase your chance of approval for a personal loan. However, you and the co-signer will still need to meet requirements. The co-signer should have a good to excellent credit score if you have a 500 credit score. The lender needs to be confident in the likelihood that the loan will be repaid by either the co-signer or the primary applicant. 

What is the difference between a co-signer and a co-borrower personal loan?

A co-signer and co-borrower serve a similar purpose but have different responsibilities. A co-borrower, also known as a joint applicant, shares equal responsibility for the loan from start to finish. A co-signer on the other hand is only held liable if the primary applicant or borrower fails to make on-time payments, defaulting on the loan agreement. While the specifics may seem a bit different, the bottom line is the co-borrower or co-signer can be impacted by the loan, just as the primary applicant can. 

How much easier is it to get a loan with a co-signer?

Applying for a loan with a co-signer might not make getting a loan any easier, but it can have its benefits. First, you’ll need to find a willing and qualified co-signer. Next, you need to find a lender that allows a co-signer with a competitive offer. Co-signer or not, you should take the same steps to prepare for getting a personal loan to help the process run smoother. This includes checking your credit score, defining your needs and budget, and comparing offers. At PrimeRates, you can get pre-qualified in less than 1 minute, expediting the journey to finding the right personal loan offer. While getting a loan might be uncertain and not always easy. One thing is sure – working with PrimeRates is one way to make the personal loan shopping process easier.

Conclusion

If you’re ready to apply for a personal loan with a cosigner, one of our featured lenders might be a perfect fit for you. Take your time while weighing your options, and apply with the institution most likely to meet your needs.

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