Best Personal Loans With a Cosigner of July 2024

If you can't get approved for a personal loan because of a low credit score or low income, applying with a cosigner may help. A cosigner promises to pay your loan if you can't. As a result, lenders may be more willing to offer you a loan, let you borrow a larger amount, or lower your rate.

But only a few lenders allow cosigners, including the ones below. Just note that you'll need to apply directly on the lender's site to add a cosigner to your application.

Personal loans with a cosigner of July 2024

Best personal loans with a cosigner

There aren't a lot of lenders that let you apply with a cosigner. But here are a few highly-rated providers that do if you apply directly on their website. Bear in mind that the cosigner is also responsible for the loan which means they'll have to pay if you default and their credit could suffer. Even late payments could negatively impact their credit.

OneMain Financial: Best bad credit personal loans

BHG Financial: Best for large personal loans

PenFed: Best credit union for personal loans

Methodology

Credible evaluated the best personal loans with a cosigner based on factors such as customer experience, minimum fixed rate, maximum loan amount, funding time, loan terms, fees, discounts, and whether cosigners are accepted. Credible's team of experts gathered information from each lender's website, customer service department, in-house resources, and via email support. Each data point was verified to make sure it was accurate at the time of publication.

Learn more about how Credible rates lenders by exploring our Personal Loans Lender Rating Methodology.

How to compare personal loans with a cosigner

As you're reviewing personal loan lenders, you may wonder which is best for your situation. Here are the main factors to consider:

• Cosigner option: Not all lenders allow cosigners, so check before you apply. Additionally, some lenders may allow co-borrowers and not cosigners. A co-borrower with good credit may also help you qualify for a loan. But, unlike a cosigner, the co-borrower has access to loan funds.
• Annual percentage rate (APR): The APR tells you how much it will cost to borrow money on an annual basis. It's better than comparing interest rates because it accounts for upfront fees, like any origination or administrative fees.
• Loan amounts: Lenders vary in the loan amounts they offer. Look for those that best suit your situation and the expense(s) you want to cover. Personal loan amounts can range from $600 to more than $100,000
• Repayment terms: The amount of time you're given to repay the loan can also vary. Longer loan terms lower your monthly payment amount but increase your overall cost. You can typically find repayment terms from 1 to 7 years, but some lenders offer longer terms for loan purposes like home improvement or buying an RV.
• Fees: Some lenders charge origination fees that vary depending on your loan amount and credit profile. Take note of the fee amount, or lack thereof, on each loan.
• Overall cost: Add up all the interest charges and fees over the loan term to find the total cost of each loan.
• Time to fund: Funding times vary. Check the average amount of time a lender takes to approve applications and deliver funds. Most lenders can fund in about a week or less, some even as soon as the same or next business day.

Lenders often provide most, if not all, of the above information when you prequalify online. The rest can usually be found in their FAQ sections, by running some numbers, or by contacting a customer support representative. Prequalification is a way to get loan quotes without impacting your credit. It only takes a few minutes and is a great way to compare APRs and terms, but it's not on offer of credit. Your rate could change once you formally apply. Once you apply, the lender will conduct a hard credit pull which could temporarily ding your score.

To find the best deal, collect quotes from a handful of companies - with and without a cosigner - and compare them side by side. Look for a lender that offers the loan amount, monthly payment, and funding time you want at a competitive overall price.

How much you can save with a cosigner

The amount a cosigner can help you save will depend on the loan rates and terms you qualify for by yourself and with them.

For example, if a lender offers you a five-year, $10,000 personal loan with a 20% APR and an 8% origination fee, you would receive $9,200 upfront (because origination fees are generally subtracted from your loan amount). The origination fee and overall interest would amount to $6,696 over the term of the loan. If you apply with a cosigner, however, and get a 10% APR and 2% origination fee, it would only cost $2,948. In this case, a cosigner could save you $3,748 over the course of the loan.

To determine the amount you can save, collect quotes with and without your cosigner and compare the costs. You can enter loan amounts, loan terms, and APRs into a personal loan calculator to figure out your total interest costs. Then, just add any additional fees lenders charge, such as origination fees.

Cosigner vs. co-borrower

When comparing lenders, you may come across some that allow co-borrowers, but not cosigners. What's the difference? Here's what to know:

• A cosigner is a person who agrees to pay for a loan if the primary borrower can't or won't. In this instance, only the borrower (not the cosigner) can access the funds. Borrowers often enlist the help of a cosigner if they can't qualify for a suitable loan on their own. If the primary borrower makes all the payments on time, the cosigner won't need to do anything. However, if the primary borrower doesn't make their payments, the responsibility to pay off the loan will fall on the cosigner. The cosigner's credit could also be hurt if the cosigner makes late payments.
• A co-borrower is a person who applies for a loan with another borrower and has equal access to the funds. For example, married couples often get mortgages together as co-borrowers. Like applying with a cosigner, lenders consider the income, assets, and credit profile of both co-borrowers during the application process.

Enlisting the help of a cosigner is often better if you plan to repay the loan on your own but can't qualify for it by yourself. On the other hand, applying with a co-borrower is better if you both expect access to loan funds. Learn More: Co-applicant vs. Cosigner

What to consider before getting a loan with a cosigner

On the upside, a well-qualified cosigner can help you get a loan with better rates and terms, which can save you a considerable amount of money. On the downside, if you end up unable to pay the loan or make payments late, it could hurt the cosigner's credit and become a financial burden, which could cause friction or even ruin your relationship.

Minimize potential cons by taking a proactive approach. If you run into trouble and foresee not being able to make a payment, let the cosigner know as soon as possible. With early notice, you can work together to avoid penalties, the entire amount coming due, and credit score damage for both of you.

Applying for a personal loan with a cosigner

If you want to apply for a personal loan with a cosigner, it will add a few extra steps to the typical loan application process. Here's what to expect:

1. Find a willing cosigner: Find a cosigner that's willing to guarantee your loan - ideally one with good to excellent credit.
2. Research and compare lenders: Look for personal loan lenders that allow for cosigners and build a shortlist of viable options that also can meet your other needs such as time to fund, and loan amounts.
3. Get prequalified: See if you prequalify with lenders on your shortlist. You'll often need to provide personal, credit, and income information for yourself and your cosigner. Once you prequalify, the rate you receive could be different from your final rate, as prequalification is not an offer of credit.
4. Pick the best option for you: Choose the lender that offers you the best deal overall and complete the full application process. Upon submitting a formal application, the lender will conduct a hard credit pull, which can temporarily lower your score by a few points.
5. Get your funds: Upon approval, you and the cosigner will sign the loan documents and the lender will deposit the funds into your bank account.

Learn More: How To Get a Personal Loan

FAQ

Can I remove the cosigner from my personal loan after a certain period?

Lenders vary in their rules regarding cosigners. Some may allow you to drop a cosigner once you've built your credit to a certain point, while others won't. However, if a lender doesn't, you can apply to refinance the loan with a new lender.

What are some alternatives to getting a cosigner?

If you'd rather not apply for a personal loan with a cosigner, you can shop around for loans on your own. Some lenders are more flexible than others and approve borrowers with fair credit. You can also ask a friend or family member for a loan, look into payday loans (which should be a last resort), or request an instant online cash advance through an app.

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