Can You Get a Personal Loan With a Cosigner?
Written by
Sarah Silbert
Edited by
Melanie Grafil
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You can get a personal loan with a cosigner — and it may even help you qualify or get a better rate. However, not every lender accepts cosigners, so it’s good to shop around.
What Is a Cosigner for a Personal Loan?Â
A cosigner is someone who puts their name on a loan application along with you to help you get approved. This can be effective if they have a higher credit score than you, as it helps the lender feel more confident about approving the loan.
What is credit, and how does that impact your chances of getting a loan, anyway? Your credit score is like your financial report card, showing lenders how responsible you have been in the past with repaying debts on time.
- High credit score: Shows that you are trustworthy
- Low credit score: Might be risky to a lender and result in stricter terms
Since a cosigner is taking on the responsibility of repaying your debt if you can’t, it’s typically a family member or trusted friend you know well.
Why Use a Cosigner for a Personal Loan?Â
Using a cosigner for a personal loan can help you qualify if you have a low credit score or if you’re new to establishing credit. Many lenders have a credit score requirement, so a cosigner can help you get around this obstacle if you can’t qualify on your own.
Using a cosigner with a good credit score can also get you a lower interest rate on your loan, and could help you get approved for a larger amount of money. Students, young adults and anyone rebuilding their credit could benefit from applying with a cosigner.
What Does a Cosigner Need to Qualify?
Since the purpose of using a cosigner is to increase your chances of getting approved for a loan, you won’t want to ask just anyone to be your cosigner.
Look for a cosigner with the following:
- A good credit score — usually considered a FICO score of 670 or higher
- Stable income
- Low debt-to-income ratio
These all signal to the lender that they’re a trustworthy borrower. They’ll also need to show proof of ID and income for the loan application.
Your cosigner needs to be willing to take legal responsibility for the loan repayment if you are unable to make payments yourself. So it should be someone you trust and who trusts you.
How Does Cosigning a Personal Loan Work?Â
When you apply for a personal loan with a cosigner, both your name and your cosigner’s name will go on the loan agreement documents, and you will both need to sign the loan agreement. However, the cosigner doesn’t get the loan money — they’re sharing the risk and agreeing to take responsibility for payment if you’re unable to.
So, does cosigning affect your credit? Yes — if you miss any payments on your loan, it will affect your credit score as well as your cosigner’s. Additionally, lenders will go after the cosigner if you default on the loan.
A loan cosigner can technically have bad credit, but keep in mind that this won’t help your approval odds, which is the main reason to use a cosigner in the first place.
Pros and Cons of Getting a Loan With a Cosigner
Asking someone to cosign on your loan isn’t just to cover your finances — both of you are also trusting one another to take on an added responsibility. Take a look at these pros and cons so you can keep your finances and the relationship you have with them safe.
| Pros | Cons |
|---|---|
| Easier approval if you have low credit | Cosigner is legally responsible if you can’t repay |
| May get a lower interest rate | Missed payments hurt both your and the cosigner’s credit |
| Can qualify for a larger loan amount | Could damage your relationship if problems arise |
| Helps build your credit if paid on time | Cosigner may have trouble qualifying for their own loans if you default |
What To Consider Before Asking Someone To CosignÂ
Before cosigning a loan for you, your family member or close friend should fully understand the risks and obligation they’re taking on. They need to be willing to pay off your loan if you can’t, so you should also have an honest discussion about your ability to repay.
Beyond signing the loan agreement together, you should put a backup repayment plan in writing to address how you’ll handle payments if you need assistance down the road.
Bottom line: Only ask someone you trust — and who trusts you.
Lenders That Offer Personal Loans With CosignersÂ
Not every lender will accept cosigners on personal loans, but here are some options that do.
Top Lenders That Accept CosignersÂ
| Lender | Cosigner Allowed | Minimum Credit Score | Loan Amount Range |
|---|---|---|---|
| SoFi® | Yes | 680 and up | $5,000 to $100,000 |
| OneMain Financial | Yes | Varies, but is primarily based on the borrower’s credit profile | $1,500 to $20,000 |
| Upstart | No | Varies, but is primarily based on the borrower’s credit profile | $1,000 to $50,000 |
| LightStream | No; joint applications are allowed | 660 and up | $5,000 to $100,000 |
| Credit unions | Yes | Varies | Varies |
| Sallie Mae — for students | Yes | No minimum, based on cosigner | Varies |
Alternatives to Getting a CosignerÂ
If you don’t have the minimum credit score required to get a personal loan and you aren’t able to find a cosigner, you have some other options.
1. Consider Applying With a Coborrower
Unlike a cosigner, a loan coborrower shares access to the loan funds, so they’re not just signing on to take responsibility for repayment in your stead. A coborrower should be someone you trust, and you should make an agreement in writing for how you’ll split up the loan funds and payments.
2. Improve Your Credit Score Before You Apply
If you’re new to credit and wondering how your credit score is calculated, several factors weigh in:
- Payment history: 35%
- Credit utilization: 30%
- Credit history length: 15%
- Credit mix: 10%
- New credit inquiries: 10%
Some of these take time to build up, but your best bet for increasing your credit score is to make on-time payments and pay off your debt.
3. Try a Secured Personal Loan
You could also try applying for a secured personal loan, which uses collateral like cash in a savings account or even the home you own. Since you’re putting up collateral, the lender may be more willing to extend you the funds even if your credit is poor.
4. Borrow a Smaller Amount
Consider borrowing a smaller amount than you originally intended if you’re struggling to get approved for a personal loan. Smaller loans are generally easier to get approved for.
Is a Personal Loan With a Cosigner Right For You?
A cosigner’s role is is the first step to getting a personal loan that puts you in a better financial position. Take a look at the lenders that allow cosigners and check the requirements to make sure you meet them. Don’t forget to discuss the responsibilities with your potential cosigner so that your goals are aligned.
Applying for a Personal Loan With a Cosigner FAQ
If you think you need a cosigner for your loan application, take a look at some of the answers to these frequently asked questions.- Can you get denied even with a cosigner?
- Yes, you can get denied for a loan even if with a cosigner if the cosigner doesn't have a high enough credit score, can't demonstrate a solid income or if their debt-to-income ratio is too high.
- Is a coborrower the same as a cosigner?
- No, there's a difference between a coborrower and a cosigner. A coborrower shares the funds of a loan, while a cosigner doesn't get any funds and only takes on responsibility to repay the loan if you can't.
- Can you remove a cosigner later on?
- You could be able to remove a cosigner later on by obtaining a cosigner release.
- How long does it take to get approved with a cosigner?
- Getting approved for a loan with a cosigner shouldn't add much time to the application process as long as your cosigner provides all their required information on the application.
To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect
your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
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- Federal Trade Commission (FTC). "Cosigning a Loan FAQs."
