How to Get a Personal Loan With a Co-Signer

If you can't get a loan on your own, a co-signer may help you get approved. Just be aware that both of you are responsible for the loan, and if you can't make payments, the co-signer's credit will be affected.

There are both benefits and risks to a personal loan that has a cosigner. Co-signers are most at risk because the loan could affect their credit score and ability to get credit. If the borrower doesn't make their payments, a co-signer may be required to take over.

A cosigner for a personal loan is a benefit to borrowers. It can also improve your chances of approval. A lower interest rate could mean lower monthly payments.

Before taking out this type of loan, both parties need to be aware of their responsibilities. Learn more about a personal loan that requires a cosigner.

What is a co-signer?

Co-signers agree to pay the loan back together with the primary borrower. When reviewing the loan application, the lender will take into account a cosigner's financial history and credit score.

Jeffrey E. Edwards is a certified financial planner from Irvine, California. "A cosigner is someone who pledges to be a responsible back-up for the borrower in the event that the borrower becomes unable to make their payments."

To help borrowers with poor or limited credit get loans or better rates, lenders may encourage them to have a cosigner. Co-signers with good credit may give lenders additional assurance that the loan will be paid off.

What is the best way to get a loan with a co-signer?

If you have poor or limited credit and are having trouble getting approved for a personal loan, it may be worth asking someone to co-sign on your loan. You could save money and get a lower interest rate by having a co-signer who has good credit.

A co-borrower does not have legal rights to the asset.

"In many cases, co-signing for a loan will help someone with poor credit history or new credit to get approved for a house, car, or other item they need," Ohan Kayikchyan (certified financial planner, money coach, and educator). Another popular scenario is where parents cosign for their child to help them establish credit.

However, cosigning can pose a risk for both the borrower and the co-signer. The relationship could be ruined if the borrower is unable to pay their bills on time or if the credit of the cosigner is damaged.

The pros and cons of personal loans with co-signers


With the assistance of a cosigner, you could repair or establish your credit rating by making on-time payments to a personal loan.

Kayikchyan states that co-signers can get a credit mixture on their credit file which, in many cases, improves their credit history.


If you don't manage the loan properly, it could cause problems for your relationship with your co-signer.

Kayikchyan states that in the worst case, the loan could go to collection. The report will also be reported on the credit reports of the cosigner. This means that collectors can potentially come after the debtors, garnish wages and place a lien on assets to recover the amount owed.

Find a personal loan co-signer

It's a difficult task to co-sign a personal loan. Here are some ways to find someone who will co-sign for a loan.

Consider other options to a personal loan without a cosigner like a secured credit card, which can help you build your credit.

No matter who your loan cosigner is, be respectful and clear about the subject. To be able to support yourself, show potential cosigners what you plan to do with the loan.

Application for a Personal Loan with a Co-Signer

These steps will help you apply for a personal loan with co-signer.

Fill out the loan application. As the lender reviews your application, wait for approval. Accept funding. Start repaying the loan as per the terms. Discuss any problems you may have with keeping up with repayments with your co-signer.

Alternatives to a Personal loan with a co-signer

These are some alternatives to personal loans with a cosigner if you don't have the option of taking out a personal loan.

Apply for secured or bad credit loans. Improve your credit. You might consider loans from other lenders. Online lenders, credit unions and other alternative lenders to banks may be willing to lend you money even if you don't have the best credit.

Edwards cautions against getting a loan without a cosigner. "Sometimes, the loan will be granted to someone who would not otherwise have access to it, and that could be for a good reason."