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Best Personal Loans With a Co-Signer

A co-signer can help you get approved for a personal loan in case you don't qualify on your own. Joint personal loans are advantageous for borrowers whose credit score, or income, is insufficient for qualification. Adding a co-signer may also help you obtain more favorable terms, such as a reduced APR or a larger loan amount.

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Joint Personal Loans Simplified

A co-signer is someone who agrees to take responsibility for the loan if the borrower is unable to pay. The main benefit of having a co-signer is that it will increase your chances of getting approved for a personal loan because lenders are more confident that they’ll get their money back from the co-signer instead of taking their chances with you.

Who Should Consider Co-Signing

When a primary borrower’s poor credit history or heavy debt load prohibits them from securing a loan on their own, a co-signer provides assurance that the loan will be repaid. The co-signer, who often has a much stronger credit history and a lower debt-to-income ratio than the borrower, guarantees the loan will be repaid.


  • Reducing your interest rate and monthly payments
  • Co-signing a loan is advantageous for the borrower. For instance, a co-signer may be required if the applicant cannot demonstrate sufficient income to obtain the loan, if the borrower has poor credit history.
  • Building credit history


  • If the principal borrower fails to make a payment, the co-signer will be liable for the missing installments.
  • The lender may sue the co-signer for collection-related interest, late fees, and attorney’s fees.
  • Cosigning might harm the principal borrower’s relationship with the co-signer. Cosigning a loan demands a high level of certainty that the principal borrower can afford the payments and will make them on time throughout the duration of the loan.
  • It is challenging to break free from co-signed loans. If the principal borrower declares bankruptcy, the co-signer may become liable for all outstanding payments.

Does Getting a Co-Signer Affect Your Credit?

Being a co-signer on loan 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.


Co-signing a loan can be a great resource to assist a relative or a loved one with access to the credit they require, as long as it is done responsibly and informedly.  Before officially engaging in a co-signed relationship, you are strongly advised to make sure that you are fully aware of the potential effects that tying your name to another person’s debt might have on your personal finances. Co-signing loans is a common practice and will likely continue to be so in the foreseeable future.


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

What should you look for in a co-signer?

What credit score is needed for a co-signer?