Top Co-Signer Personal Loan Providers
What is A Co-Signer Loan, And Who is it Good For?
A co-signer loan is a type of loan that involves a secondary borrower, usually someone with a better credit score, who agrees to take on responsibility for repaying the loan if the primary borrower defaults.
- Best for: This type of loan can be helpful if you have a bad credit score or no credit history at all.
- Better chances of approval: Having a co-signer with a good credit history can improve your chances of being approved for a loan and getting more favorable terms, such as lower interest rates.
- Multipurpose: Co-signer loans can be used for a variety of purposes, including financing a car or home, paying for education, or consolidating debt.
- Co-signer vs. co-borrower: A co-signer is not the same as a co-borrower. A co-signer can help you qualify for financing if you need it. A co-borrower — like the primary borrower — has full access to the loan’s funds. Both a co-signer and a co-borrower are responsible for repaying the loan, but a co-signer will only make payments if the borrower does not.
Pros and Cons of Using a Co-Signer for a Personal Loan
Co-Signer Loan Pros
- Easier to get if you have poor credit or limited income
- May help you qualify for higher rates, better terms, or larger loan amounts
- Funds can be used for nearly anything
Co-Signer Loan Cons
- Not all lenders offer co-signer loans
- Could strain your relationship with your co-signer if you default on payments
- Both parties are responsible for loan repayment
The biggest perk of having a co-signer is that they can increase your chances of getting a personal loan when you need it most. As long as they’re considered “creditworthy,” the lender will view you as a lower risk and may be more willing to lend you money.
There are a few drawbacks to using a co-signer to back your loan, though. For example, the co-signer will have to repay the debt if you — the primary borrower — default on payments. If that happens and the co-signer is short on funds, this could lead to late fees and hurt both people’s credit score.
How to Get a Co-Signer Personal Loan
The process of getting a joint loan is similar to how you would get a typical personal loan. Some lenders have their own application process, but here’s a general overview of how to do it:
- Review your credit. Before you apply for any financial product, it’s important to check your credit. Ask your co-signer to check their credit, too, to make sure it’s high enough to help you qualify for a loan.
- Check the lender’s requirements. Most lenders require borrowers to meet certain credit score, income, and debt-to-income (DTI) ratio criteria. If your co-signer meets or exceeds these requirements, you could potentially get better terms or rates.
- Gather your documents. Both you and your co-signer will typically need to provide the same documents. This can include your driver’s licenses, Social Security numbers, paystubs, W-2s, and recent bank statements. It may also include contact information from both parties.
- Shop around for lenders. Not all lenders offer joint loans, so you may need to shop around to find those that do. It’s also a good idea to compare several lenders before choosing one. Compare their eligibility requirements, loan rates and terms, lender fees, and online reputation. Pick a lender with a competitive offer and minimal to no fees.
- Prequalify for a loan. Prequalifying lets you check your possible rates and terms without hurting your credit.
- Complete the loan application. After finding the best lender for your co-signer loan, fill out and submit the formal application. Your co-signer will either have to complete their own application or add their information along with yours.
- Wait for the decision. The lender will review both your and your co-signer’s information to determine whether to approve or deny your application. This can take anywhere from a day to a couple of weeks, depending on the lender.
- Receive funds. Once approved, review and sign the loan agreement. You’ll then receive the funds in your bank account — sometimes within a few business days.
- Start making payments. Now that you have a joint loan, you’ll need to start making payments until it’s repaid in full.
Co-Signer Loans: What to Consider
Here are the top things to consider when looking for a co-signer personal loan loan:
- Co-signer requirements: Your co-signer should be someone with good money management habits and a history of making on-time payments. They should have good or great credit (670+), a steady income, and a low DTI ratio.
- Cost of the loan: A joint loan comes with its own interest rate and repayment term. Some lenders also charge additional fees, such as origination or prepayment fees. Use an online calculator to determine the total cost of the loan and calculate your estimated monthly payments. Choose a loan that you can comfortably afford to repay.
- Time to funding: Certain online lenders offer same-day or next-day funding options. This could be a good option if you need the cash quickly.
- Building credit: You may be able to build credit using a co-signer loan, but you’ll need to keep your credit utilization low and consistently make on-time payments.
Should You Get a Personal Loan With a Co-Signer?
A co-signer personal loan could be a good option if you:
- Have poor credit or limited credit history
- Don’t meet the minimum income requirements
- Have a high DTI ratio
- Want to get a lower interest rate or better loan term
- Are trying to build credit and can afford the loan’s monthly payments
- Have a good relationship with your co-signer
However, a joint loan isn’t always the best idea. A joint loan could add more financial stress or strain your relationship with your co-signer. This can happen if you miss payments, and your co-signer has to pay instead.
When comparing lenders, look into their eligibility requirements. Most lenders will require you to:
- Be 18+ years of age
- Be a resident of a state in which the lender operates
- Have a valid driver’s license or government-issued photo ID
- Have a minimum credit score and income, as well as a maximum DTI ratio
Does Getting a Co-Signer Affect Your Credit?
Being a co-signer on might assist in establishing credit. The principal loan holder and co-signer share equal financial liability, and the loan will appear on both credit reports. However, your score could also be badly impacted if the primary account holder misses payments.
Indeed, co-signers are expected to make payments if the primary account holder fails to do so – Your credit score might decrease if the recipient makes late or no payments. In addition, while having many credit lines may help you appear favorable to potential lenders, it only accounts for a minor portion of your credit score. Typically, this is only beneficial if you have demonstrated that you can manage many lines of credit over an extended period by making payments on schedule and keeping balances low.
On a final note, your debt would rise as the debt of the consignee would be shown on your credit record. This increase in the debt you owe will be reflected in the relevant section of your credit report.
Alternatives to Co-Signer Loans
If a co-signer loan isn’t right for you, here are a couple of alternatives to consider:
- Build your credit. If your credit score is holding you back, take some time to improve it. Review your credit reports for errors and dispute them. Make on-time payments and try to lower your existing debt load. If needed, get a secured credit card or credit-builder loan to boost your score over time.
- Use a secured personal loan. These loans are secured with an asset, or collateral, like a paid-off vehicle or house. If you default on payments, the lender can take the asset instead. This makes them less risky to the lender than unsecured loans. These loans also tend to have more lenient requirements.
- Get a low-interest credit card. A credit card could be useful if you need to consolidate debt, pay for emergencies, or purchase a big-ticket item. You may need good credit to qualify for a competitive interest rate or higher credit limit, though.
- Use a loan from your retirement account. If you have a retirement account, you may be able to take out a loan to cover emergencies or other expenses. For example, some 401(k) plans offer 401(k) loans. These loans can be used for almost anything. In the case of a 401(k) loan, you can only borrow up to 50% of your account balance or $50,000 (whichever is less). Depending on the retirement account, you could be facing an early withdrawal penalty or have to pay taxes on the borrowed amount.
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Average Co-Signer Personal Loan Rates
The best co-signer loans will come with flexible repayment terms and a low APR (annual percentage rate). The rate depends on several factors, including the borrower’s and co-signer’s credit scores. Here are a few examples of reputable lenders and their joint loan offers:
| Lender |
APR (Fixed) |
Loan Term |
Loan Amounts |
Recommended Minimum Credit Score |
| LightStream |
7.99% to 25% |
24 to 144 months |
$5,000 to $100,000 |
660 |
| SoFi |
8.99% to 23.43% |
24 to 84 months |
$5,000 to $100,000 |
680 |
| Upstart |
6.70% to 35.99^ |
36 to 60 months |
$1,000 to $50,000 |
580 |
| LendingClub |
8.05% to 36% |
36 to 60 months |
$1,000 to $40,000 |
600 |
| Credible |
5.40% to 35.99% |
12 to 84 months |
$600 to $100,000 |
600 |
| LendingTree |
5.99% to 35.99% |
3 to 180 months |
$1,000 to $50,000 |
550 |
*Rates and requirements are subject to change
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