For people wanting to qualify for a personal loan, the struggle is real. According to Federal Reserve data, 18.7% of people who applied for credit – such as a credit card, personal loan, or auto loan – were denied. If you’re looking for a personal loan but have bad or fair credit (a FICO score less than 670), consider applying with a cosigner.
Lenders generally prefer well-qualified borrowers-those with steady incomes, good to excellent credit and a history of on-time payments. If that doesn’t describe you, a cosigner that meets those qualifications can strengthen your application. But applying with a cosigner isn’t right for everyone, and not all lenders allow you to. Learn how cosigned loans work, about their benefits and risks and consider alternatives before applying
Compare personal loan interest rates
You’ll need to visit the lender’s site directly to apply with a cosigner, but you should prequalify on your own first to see if you’re likely to get a loan without a cosigner, and at what rate. Note that only the most qualified candidates are eligible for the lowest annual percentage rates (APRs).
Advertiser Disclosure
Overview
Lightstream is one of three Credible partner lenders to offer loan amounts up to $100,000, which makes it ideal for financing large expenses like home improvements or weddings. Funds are available as soon as the same day you apply, and you’ll have up to 12 years to repay certain types of loans, including home improvement loans, RV loans, and boat loans. There are no origination fees, and rates are low — Lightstream’s lowest APR beats SoFi’s advertised lowest APR by 1 percentage point. But you’ll need good credit to qualify.
Unlike most lenders, Lightstream does not let you prequalify on its site. Nor does it provide a contact phone number next to its customer service hours on its website.
Repayment terms
2 – 12 years, depending on loan purpose
Eligibility
Available in all states except RI and VT
Time to get funds
As soon as the next business day
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
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Overview
Upstart has one of the lowest available APRs of Credible partner lenders and of all non-partners we reviewed, making it a good choice for well-qualified applicants. However, it’s also is one of few lenders that doesn’t have a minimum credit score requirement (if you apply on the lender’s website), which makes it an option if you have bad credit or no credit history. Upstart may charge an origination fee as high as 12%, but good-credit borrowers may not be charged one at all.
Trustpilot gives Upstart 4.9 stars, which is the highest of all lenders we reviewed.
Time to get funds
As soon as 1 to 3 business days
Loan uses
Pay off credit cards, consolidate debt, relocate, make a large purchase, and other purposes
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Overview
Discover Personal Loans offers low APRs, repayment terms up to seven years, no origination fees, nationwide availability, and doesn’t require your Social Security number to prequalify on its site. You’ll need to have an annual income of at least $40,000, and a FICO score 660 or higher, to be eligible. If your credit score is fair or poor, you’ll need to go elsewhere, as Discover doesn’t allow cosigners.
Funds are available as soon as the next business day after loan approval.
Eligibility
Available in all 50 states
Time to get funds
Funds can be sent as soon as the next business day after acceptance
Loan uses
Auto repair, credit card refinancing, debt consolidation, home remodel or repair, major purchase, medical expenses, taxes, vacation, and wedding
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Overview
Upgrade has a suite of features that make it a very attractive lender: competitive interest rates, discounts for direct pay and autopay, as soon as same-day funding, up to seven-year repayment terms, and nationwide availability. Plus, loans are available to fair-credit borrowers, and you don’t need to input your Social Security number to prequalify on the website. Upgrade even offers secured personal loans, which is not common among lenders.
However, Upgrade does charge an origination fee of 1.85% to 9.99%. You must have a FICO score of at least 600 and a minimum income of $25,000 annually to qualify.
Loan amount
$1,000 to $50,000 ($3,005 minimum in GA; $6,600 minimum in MA)
Loan uses
Credit card refinancing, debt consolidation, home improvement, major purchase, other
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Overview
LendingClub is a solid lender for good credit borrowers and some fair credit borrowers that apply directly on its website. It’s easy to prequalify with LendingClub, especially if you’re uncomfortable providing your Social Security number, as the company doesn’t require it at the prequalification stage. (You will need to provide it if you move forward with a full application.)
While prequalification is not a guarantee that you’ll be approved for a loan, LendingClub does a better job than most other Credible partner lenders at approving applicants that have successfully prequalified. In other words, you’re less likely to have your application declined once you apply (if you’ve already prequalified). LendingClub may charge an origination fee between 3% and 8%.
Eligibility
Available in all 50 states
Loan uses
Debt consolidation, paying off credit cards
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Overview
SoFi stands out for offering no-fee personal loans with competitive rates, high loan amounts, long loan terms, discounts for autopay and direct pay, and funding as soon as the same day. Plus, SoFi prioritizes convenience for existing and potential customers with features like live chat and an easy prequalification process that doesn’t require your Social Security number.
The main catch is that you need to qualify for a loan with SoFi, which can be hard to do if you don’t have good credit. You also won’t be able to apply with a cosigner, since SoFi doesn’t accept cosigners; nor does it offer secured personal loans.
Fees
Option to pay an origination fee in exchange for a lower rate
Eligibility
Available in all states
Time to get funds
Typically within a few days, given approval and bank account verification, but sometimes within the same day
Loan uses
Solely for personal, family, or household uses
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Overview
Best Egg is a solid lender for a wide range of borrowers and, notably, scored second for personal loan satisfaction in J.D. Power’s Consumer Lending Study. It offers competitive rates, reasonable loan terms and amounts, and personal loans for fair credit. You’ll need a FICO score of at least 600 to qualify, but the lower your score, the higher your APR may be. The APR includes the interest rate and origination fees, which range from 0.99% to 9.99% with Best Egg.
Note that if you successfully prequalify with Best Egg, you may be more likely to be approved for the loan relative to other lenders you prequalify with. Based on Credible data, borrowers who chose to apply for a loan with Best Egg were more than twice as likely to be approved (relative to most other Credible partners).
Fees
Origination fee, late fee, unsuccessful payment fee, check processing fee
Eligibility
Available in all states except DC, IA, VT, and WV
Time to get funds
As soon as 1 to 3 business days after successful verification
Loan uses
Credit card refinancing, debt consolidation, home improvement, and other purposes
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Overview
Avant personal loans are a good choice for borrowers with bad credit looking for small- to moderate-sized personal loans. Loans are available up to $35,000 and you could get the money as soon as the next business day after approval. Plus, Avant is more likely than some lenders to approve the applications of borrowers who’ve prequalified with Avant. However, the lender charges an origination fee up to 9.99%, and its top-range interest rates are among the highest of the lenders we reviewed.
Fees
Origination fee, late fee, dishonored payment fee
Eligibility
Available in all states except HI, IA, MA, ME, NY, VT, and WV
Time to get funds
As soon as the next business day (if approved by 4:30 p.m. CT on a weekday)
Loan uses
Debt consolidation, emergency expense, life event, home improvement, and other purposes
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Overview
It’s worth considering a personal loan through Splash if you have good credit (ideally, a FICO score above 700). The platform offers loans from a wide range of lenders, and next-day funding is available. Plus, Splash has a live chat feature so you can get real-time answers without having to wait on hold or for an email. Loans are available up to $100,000 if you apply via Splash’s website.
Rates are competitive, but borrowers with excellent credit may find lower APRs elsewhere. If you need a repayment term longer than five years, you’ll need to look elsewhere as well.
Loan amount
$5,000 – $100,000 (up to $35,000 on Credible)
Eligibility
Available in all states except VT. OH and NM net disbursed amount must be greater than $5,000. MA must be greater than $6,000
Time to get funds
Same day available, typically 1-3 days
Loan uses
Debt consolidation, home improvement, medical expenses, major purchases
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Overview
Universal Credit is one of a handful of lenders that offers personal loans for bad credit. If your FICO credit score is at least 560, you may be eligible for a Universal Credit personal loan. It offers loan amounts up to $50,000, repayment terms up to seven years, and discounts for direct pay and autopay. Funds are available as soon as the next business day after loan approval.
Note that rates and fees can be relatively high — you may pay an origination fee from 5.25% to 9.99%, and APRs start at 11.69%. If you get a loan with a high interest rate, consider refinancing your personal loan at a lower rate once you’ve improved your credit score.
Eligibility
A U.S. citizen or permanent resident; not available in DC, IA, SC, WV
Time to get funds
As soon as 1 business day after acceptance
Loan uses
Debt consolidation, pay off credit cards, home improvements, unexpected expenses, home and auto repairs, weddings, and other major purchases
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Overview
Happy Money has been in operation since 2009 (formerly known as Payoff). It’s an option for fair-credit borrowers (plus those with better credit), and notably has a relatively low top-end APR. In other words, you could qualify for a lower rate with Happy Money with fair credit, relative to other lenders that offer fair-credit loans. The company does charge an origination fee on some loans, up to 5%, but that’s not as high as some other lenders’ origination fees.
You should be prepared to wait a few days to get your money, as funding can take three to five days once approved. And loans aren’t available in Massachusetts or Nevada. Happy Money has an A+ rating with the BBB and is ideal for debt consolidation and credit card consolidation loans.
Eligibility
Available in all states except MA, MS, NV, and OH
Time to get funds
As soon as 2 – 5 business days after verification
Loan uses
Debt consolidation and credit card consolidation only
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Overview
BHG Financial stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You’ll have up to 10 years to repay the loan, but you’ll need an annual income of at least $100,000 to qualify and a FICO score that’s 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can’t prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
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Overview
Reach is an option if you have fair credit, especially if you need money fast. According to the company, 90% of Reach personal loans are funded within one day of approval.
It’s a good choice for debt consolidation and credit card refinancing, but borrowers with excellent credit may not find the lowest rates with Reach. The company also charges more fees than some of its competitors and doesn’t offer direct pay or autopay discounts. If you need a 7-year term loan, you’ll need to look elsewhere. Reach personal loans are not available in all states.
Fees
Origination Fee, $15 Late Fee, $25 NSF Fee
Eligibility
Available in all states except CO, CT, ME, NV, NH, TN, VT, WV, WY, and all U.S. Territories
Time to get funds
Funds typically deposited into your account in 1 business day13
Loan uses
Debt consolidation, credit card refinancing
Read full review
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can’t, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn’t a given.
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Read full review
Buyside does not make or arrange loans.
Best personal loans with a cosigner
Most lenders don’t offer cosigned personal loans, but the following lenders do. Although the requirements for loans with a cosigner vary, lenders typically expect cosigners to have a good credit history with on-time payments, a steady income and to meet the lender’s minimum credit and income requirements.
You’ll need to visit the lender’s website directly to apply for a personal loan with a cosigner.
Best bad credit personal loans
Loan Amount
$1500 to $20000
Pros
Flexible eligibility requirements
Offers secured options
Competitive bad-credit loans
Physical presence
Cons
Availability
Origination fees
High starting APR
Overview
OneMain Financial has multiple options for bad-credit personal loans. There is no minimum credit score required (if you apply directly with OneMain), which means you could get a loan with bad credit (FICO below 580). Plus, cosigners are allowed — a cosigner is someone (ideally, with good credit) who promises to repay the loan if you can’t, which can make it easier to qualify or lower your rate. And, secured personal loans are available. You secure a loan with collateral, which may also help you qualify or lower your rate.
Rates are higher than competitors and OneMain charges origination fees as either a flat fee up to $500, or a percentage from 1% to 10% (depending on your state of residence). Note that even if you prequalify for a personal loan with OneMain, getting approved isn’t a given.
Fees
Origination fee, unsuccessful payment fee, late fee
Eligibility
Must have photo I.D. issued by U.S. federal, state or local government
Time to get funds
As soon as 1 to 2 days after acceptance
Loan use
All except business, and education
Best for large personal loans
Loan Amount
$20000 to $200000
Pros
Eligible applicants can borrow up to $200,000
Considers borrowers with fair credit
Long repayment terms
Cosigners allowed
Cons
Not available in MD or IL
No discounts
Minimum annual income requirement of $100,000
Funding takes at least five days
Overview
BHG Financial stands out for offering the largest loan amounts — up to $200,000 — of any Credible partner lenders. Simply put, if you need an unsecured personal loan over $100,000, there are very few places to look, but BHG is one. You’ll have up to 10 years to repay the loan, but you’ll need an annual income of at least $100,000 to qualify and a FICO score that’s 660 or higher. However, if you have a cosigner that meets these requirements, BHG will consider your application.
Loan amounts start at $20,000, so look elsewhere for small loans. And BHG charges a modest origination fee between 2% and 4%, depending on your financial profile. Loan funds are available within three to 14 days of loan approval. Note that you can’t prequalify with BHG.
Fees
Origination fees, late fees
Eligibility
Available in all states except Maryland and Illinois
Loan uses
Debt consolidation, baby (adoption), engagement ring financing, moving (relocation), business, home improvement, special occasion, cosmetic procedures, major purchase, taxes, credit card refinancing, medical expenses, vacation, wedding, other
Best credit union for personal loans
Loan Amount
$600 to $50000
Pros
No origination fee
Allows cosigners
Small loan amounts available
May fund in 1 to 2 business days
Cons
No discounts
Good credit required
Overview
PenFed is a credit union that offers personal loans to applicants with good credit. Though you’ll need to become a member to receive a loan, membership is open to everyone. PenFed shines with no origination fees, small available loan amounts, and low interest rates. If you don’t have a FICO score above 700, you may not qualify on your own, but can apply with a cosigner with good credit — which is not something most lenders offer.
PenFed doesn’t have a minimum income amount, and offers live chat and an entirely online loan application process.
Fees
Unsuccessful payment fee, late fee
Time to get funds
Typically 1 to 2 business days after verification
Loan uses
Debt consolidation, home improvement, credit card refinancing
What is a cosigner?
A cosigner is someone who agrees to take legal responsibility to pay a debt if you don’t pay back a loan as agreed.
Your cosigner signs the loan with you, assuming responsibility for the loan and payments, but does not have access to the loan funds. Ideally, they should have a strong credit history and income to help you qualify.
If you stop making payments, your cosigner may need to resume payments, although some states require creditors to attempt to collect from the primary borrower before moving on to the cosigner. Also note that any late payments you make will hurt your cosigner’s credit score and history as well as your own.
A co-signer may be an option if you can’t qualify for a loan by yourself because your income or credit score are too low, or your debt-to-income ratio (DTI) is too high. But it could also strain a relationship if you’re unable to make payments or default.
Note: Cosigners can sign for various types of loans, including auto loans, student loan refinancing and personal loans.
Cosigner vs. co-borrower
When you search for personal loans with a cosigner, you might come across loans with co-borrowers. Like a cosigner, a co-borrower signs for a loan with you. However, a co-borrower is eligible for an equal share of the loan funds or the asset the loan covers, like a home or vehicle. They’re also expected to make monthly payments on the loan, along with you.
Cosigners do not have a stake in your loan funds or covered assets, nor do they need to make monthly payments on the loan while you pay it.
These examples illustrate the differences between a cosigner and a co-borrower:
- Cosigner: A father wants to help his 21-year-old son buy his first vehicle. The son has just started building his credit, and his credit history is too new to qualify for a car loan. The father has an established credit history and income that’s over the lender’s minimum requirement, so he cosigns the loan to help his son qualify. The son then uses the loan to purchase a car that is under his own name.
- Co-borrower: A married couple applies for a home improvement loan together to make renovations. They are both co-borrowers, as they’ll apply for the loan and make loan payments together for renovations on a home they both own.
How do personal loans with a cosigner work?
Loans with a cosigner typically require the cosigner to meet the criteria that you are struggling to meet on your own. For instance, if your income falls below the minimum income requirement for the amount you want to borrow, your cosigner’s income should meet or exceed the lender’s minimum.
While you apply and sign for the loan as the primary borrower, your cosigner only signs for the loan as a cosigner. Still, lenders often request the same information about your cosigner that you provide about yourself, like credit history, income verification and current debts.
Make payments according to your loan’s terms after receiving your funds. Failure to pay may lead to you and your cosigner’s credit score lowering.
Repayment terms for a personal loan, even with a cosigner, range between two to seven years or more depending on the lender and the reason for the loan.
Benefits and risks of a personal loan with a cosigner
Benefits
- Loan approval
- Access to lower rates
- Both you and your cosigner can build credit
Risks
- Late payments, missed payments, or default could damage the relationship
- Late payments, missed payments, or loan default could hurt your cosigner’s finances and credit
The primary benefit of a cosigned loan is that your cosigner’s income and credit history may help you get the loan you want. If your cosigner is highly qualified, your lender might even approve you for a low interest rate.
For example, according to Credible data, the average APR for a three-year loan for an applicant with a credit score below 599 is 29.65%. However, the average APR for the same loan for an applicant with a score above 780 is 13.18%. To help illustrate the difference, a $10,000 loan would have a $423 monthly payment at a 29.65% APR, or a $338 monthly payment at a 13.18% APR.
But cosigned loans also come with risks. If you stop making payments on your loan, your cosigner may need to start paying. Plus, late or missed payments can affect your and your cosigner’s credit. On the other hand, making regular, on-time payments could boost both of your credit scores.
Work together with your cosigner to find the right loan and avoid borrowing more than you can reasonably afford. Be transparent about your income and budget so they can determine if cosigning on your loan is the right decision for them.
How to get a personal loan with a cosigner
The path to getting a personal loan with a cosigner is similar to getting an individual personal loan, but you may need to do a little more research to find the right lender and loan terms that suit you and your cosigner.
Here are the pre-application steps to take:
- Find a lender that allows cosigners: Not all lenders offer personal loans with a cosigner, and those that do may have restrictions on your loan usage or minimum amount. Consider trying your bank or credit union first before researching online lenders.
- Compare lenders: Some lenders charge origination fees, which could be up to 12% of the loan amount, in addition to late fees, and APRs can vary widely between lenders-up to 35.99%. Compare these details between lenders on your shortlist to find the best personal loans with a cosigner for your budget.
- Prequalify for a loan: Prequalifying for a loan lets you check the loan rates and terms you may qualify for before applying, and it won’t harm your credit as it only requires a soft credit check. Prequalification is an estimate of what your rates could be and is not an official offer of credit. Compare rates you might get on your own with the rate on a cosigned loan to make sure using a cosigner is worth it.
- Review loan options with your cosigner: Your cosigner should have a say in the loan terms you choose, since they’ll assume some responsibility and risks when they cosign on your loan. Review repayment terms and loan amounts with your cosigner to determine the best fit for you both.
How to apply for a personal loan with a cosigner
- Fill out the application with your cosigner: You and your cosigner will need to fill out the application together. Your lender may require each of you to provide proof of income, proof of address and your Social Security numbers to complete the application. You’ll also need to provide your bank account information if your lender sends funds via direct deposit.
- Wait for approval: After submitting your application, your lender will review it to determine your eligibility and conduct a hard credit pull for both applicants. It’s a good idea to let your cosigner know that their score could dip a few points from the credit check. Depending on the lender, approval processes can be immediate or take a few days.
- Get your loan funds: Some lenders may offer quick loans with a cosigner, depositing your funds into your bank account electronically the same day you apply. Others could take up to a week to deposit your loan funds.
- Keep your cosigner in the loop: Maintain open communication with your cosigner after receiving your loan. Let them know your monthly due date, payment amount and if you have goals for paying extra each month or paying off your loan early. Also, create a plan for missed payments. For example, if you can’t afford to make payments for two months, perhaps your cosigner can take over payments temporarily if you agree to pay them back.
The formal application requires a hard credit pull, which may reduce your and your cosigner’s credit scores by a few points temporarily.
Alternatives to a personal loan with a cosigner
If you’re unable to find someone to cosign your loan or don’t believe a cosigned loan is the best option for you, consider these alternatives:
- Secured loan: A secured personal loan is backed by collateral, such as your car or a savings account. Collateral can reduce your interest rate and help you qualify with a lower credit score or short credit history. If you opt for a secured loan, you may not need a cosigner. Keep in mind if you default on the loan your collateral may be seized.
- Family or friend loan: A friend or family member may be willing to offer you a loan if you make payments to them plus interest. This can be a good alternative to going through a traditional loan process and potentially paying origination fees, late fees and high interest rates if you have bad credit or no credit history. If you opt to go this route, set up a contract and have all terms in writing so there is no miscommunication around repayment.
- Credit card: If you have a credit card, you might use it for purchases that you can pay off within the card’s grace period (usually one billing cycle). Interest isn’t charged during the grace period. But if you can’t pay the amount back within that time, interest will be charged on a daily basis and can rapidly increase the amount you owe.
- Home equity loan: A home equity loan gives you money backed by the equity you’ve built up in your home. You’ll typically need well over 20% available equity to qualify and the approval process can take weeks or longer. But rates are often lower than personal loans, since your home is used as collateral.
FAQ
What credit score does a co-signer need for a personal loan?
Cosigners should meet or exceed a lender’s minimum credit score requirements for a personal loan. Most lenders prefer borrowers with a credit score above 670, but each has its own specific criteria and benchmark. If your credit score is very low, your cosigner may need to have a credit score of 700 or more to increase your chances of approval.
Who gets the credit on a cosigned loan?
A cosigned loan goes on both your and your cosigner’s credit report. You both can get credit boosts if you pay your loan payment in full and on time each month. Similarly, if you miss a payment, it could affect both you and your cosigner’s credit negatively.
What if I can’t repay a loan with a cosigner?
If you’re unable to repay your cosigned loan, your lender may require your cosigner to resume payments. Some states may require your lender to try to collect payments from you before attempting collections from your cosigner.
Is it easier to get approved for a loan with a cosigner?
Generally, it can be easier to get approved for a loan with a cosigner, especially if you have new credit or credit that’s too low to qualify on your own. Lenders consider your and your cosigner’s income, credit history and credit score when reviewing your application, so your cosigner’s eligibility may help you qualify.
Meet the contributor
Amy Boyington is a freelance writer specializing in education, personal finance, and financial literacy. Since launching her writing business in 2016, she has helped more than 100 clients build their digital content databases through blogs, informational guides, and copywriting. Her work has also been featured in publications like Forbes Advisor and Homeowner.
