Taking out a personal loan with a cosigner

If you don’t have perfect credit or are afraid you might not get approved for a personal loan, adding a cosigner can help

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Applying for a personal loan with a cosigner can increase your approval odds and may help you get a lower interest rate. (Shutterstock)

If you have bad credit or inconsistent income history, it might be hard to get a personal loan on your own. Adding a cosigner to your application can help.

A cosigner agrees to make payments on the loan if you fail to. Their name goes on the loan application, and the lender takes their credit score, income, and other financial details into account when reviewing your application.  

If you think you need a cosigner to get a personal loan, make sure to shop around, as not all lenders allow them. Here are six personal loan lenders that allow cosigners, and what to consider before applying with one.

Credible makes it easy to see your prequalified personal loan rates from lenders who allow cosigners.

6 personal loans for borrowers with a cosigner

If you want to use a cosigner to help you get a personal loan, the following six Credible partner lenders allow cosigners: 


FreedomPlus specializes in personal loans. The lender offers same-day decisions, and you can get funding in as soon as two business days. It also offers lower rates if you plan to use at least 85% of your loan funds to pay off debt. 

  • Loan amounts: $10,000 to $50,000
  • Loan terms: 2 to 5 years
  • Minimum credit score: Does not disclose 

Happy Money

Happy Money, formerly Payoff, offers personal loans designed to help consumers pay off credit card debt. The company says that borrowers who use its Payoff Loan to pay off at least $5,000 in balances will boost their FICO Score by 40 points or more.

  • Loan amounts: $5,000 to $40,000
  • Loan terms: 2 to 5 years
  • Minimum credit score: 600


LendingClub offers personal loans, business loans, banking services, and more. The company offers fixed interest rates and funding in as soon as two days.

  • Loan amounts: $1,000 to $40,000
  • Loan terms: 3 or 5 years
  • Minimum credit score: 600


LightStream, the online lending division of Truist Bank, offers personal, auto, home improvement, and debt consolidation loans, as well as many other types of financing. You can use the company’s app to both apply for and manage your loan, and you can get funding as soon as the same business day. 

  • Loan amounts: $5,000 to $100,000
  • Loan terms: 2 to 7 years (12 years for home improvement loans)
  • Minimum credit score: 660


PenFed is a credit union that offers banking, credit cards, mortgages, and many types of loans. You don’t have to be a credit union member in order to apply (though you’ll need to become a member if you decide to move forward with the loan). PenFed can fund loans in two to four business days after verification. 

  • Loan amounts: $600 to $50,000
  • Loan terms: 1 to 5 years
  • Minimum credit score: 660


SoFi offers personal loans, student loans, mortgages, credit cards, banking, and investing options. SoFi doesn’t charge any fees on its loans, and the lender typically funds loans within three business days. You can apply for a loan online or through the SoFi app.

  • Loan amounts: $5,000 to $100,000
  • Loan terms: 2 to 7 years
  • Minimum credit score: Does not disclose

Visit Credible to compare personal loan rates from these and other lenders, without affecting your credit score.

How to find a cosigner

If you’re planning to use a cosigner, choose yours carefully. You’ll want one with a good credit score, a history of on-time bill payments, and steady income.

Most people choose cosigners who are family members — like a parent, grandparent, aunt, uncle, or sibling. In some cases, a close friend may also be an option. Just make sure they understand that they’re legally obligated to repay the loan if you don’t, and that failing to do so could hurt their credit.

What to consider before getting a cosigner on a personal loan

Think carefully before asking someone to cosign a loan with you. While it could help your chances of approval and of getting a lower interest rate, it can also be risky to the person cosigning — especially if you have trouble staying on top of your bill payments.

If you’re thinking about asking someone to cosign your personal loan, ask yourself the following questions:

  1. How likely are you to stay on top of payments? If there’s a chance you might fall behind on payments, it could be a big risk to your cosigner. If they’re unable to make the payments in your place, it could hurt their credit (as well as yours) and make it harder for them to get approved for loan products in the future.
  2. How strong is the relationship? If your cosigner has to start making payments on your loan, it could strain your relationship. Make sure your relationship with the person is strong enough to weather a possible financial storm.
  3. What are the cosigner’s finances like? You want a cosigner with a high credit score, positive payment history, and steady income. It should also be someone you’re comfortable talking finances with.
  4. Does the lender offer any cosigner release options? Many lenders allow you to release the cosigner after a year or two of consecutive, on-time payments. Always ask your lender if it offers cosigner releases and, if so, how far into the loan’s term you can apply for one.

Before you ask someone to cosign a loan with you, have a plan for repaying the loan. You can even make a monthly budget to show the cosigner how you plan to stay on track. This can reduce their risk and make them more willing to sign on.

If you’re ready to apply for a personal loan, Credible lets you quickly and easily compare personal loan rates to find one that best suits your needs.