Personal Loans with Cosigner
People who can’t qualify for a personal loan alone may consider a co-signed or joint loan. Including another person’s credit history and income on a personal loan application might help you qualify for a cheaper interest rate or a more significant loan amount. Discover the options provided by 15M Finance and learn how to get personal loans with a co-signer.
Table of Contents
- What is a Co-signed Personal Loan?
- Co-signer vs. Co-borrower: Main Differences
- When Should I Get a Co-signer Loan?
- Risks of Getting Personal Loans with Co-signers or Co-borrowers
- Tips for Getting Personal Loans with a Co-signer
- Eligibility Criteria to Meet When Applying for a Co-signer Personal Loan
- How to Get a Personal Loan with a Co-signer?
- Where to Get the Best Personal Loans with Cosigners?
- Frequently Asked Questions
What is a Co-signed Personal Loan?
A co-signed personal loan is a financial product you can get by using a person’s excellent credit score to get better interest rates or more flexible repayment terms. Even if many lenders don’t have minimum credit score requirements, you can increase your approval chances if you use a co-signer or co-borrower to get secured personal loans if you don’t have a good credit score.
Co-signer vs. Co-borrower: Main Differences
Bad credit borrowers may use a co-signer or co-borrower to get better personal loan offers, but you must consider the main difference between these two concepts.
A co-signer vouches for another person’s loan application and pledges to repay it if the borrower does not and their credit scores participate in the personal loan application. The co-signer needs access to the loan profits or information regarding the loan, such as how much you’ve returned or whether you missed a payment.
Meanwhile, a co-borrower is a partner applicant on a combined personal loan who shares repayment responsibilities. This individual has equal access to loan funds in the bank account and payment information.
When Should I Get a Co-signer Loan?
Considering a co-signer or co-borrower personal loan may seem like a perfect idea, but you can’t use it whenever you want. The following situations are perfect for getting the best personal loans with a co-signer:
You have a poor credit history. Personal loans for a poor credit report are available. However, only some lenders accept candidates with credit ratings below 600. A co-applicant with a better credit score may boost your approval chances if this describes you. You want more significant personal loan amounts. Because lenders provide the most extensive personal loans to the most eligible applicants, having a co-applicant may enhance the personal loan size. You require a lower interest rate and origination fee. Because the APR influences the monthly payments set in the loan agreement, including someone on the application may result in a lower rate, resulting in a less costly personal loan.
Risks of Getting Personal Loans with Co-signers or Co-borrowers
While personal loans with a co-signer or co-borrower have many advantages, they also carry several risks you must consider. Here are cases when getting personal loan proceeds are risky:
- If you and the co-borrower don’t make the loan payments on time, you both are in charge of making debt consolidation.
- Some lenders may perform a hard credit check when applying for personal loans, affecting the primary borrower’s credit score.
- Getting personal loans with a co-borrower or co-signer may increase your debt-to-income ratio.
Tips for Getting Personal Loans with a Co-signer
To ease your mission in comparing personal loans and getting better interest rates, here are several tips and tricks from 15M Finance financial experts:
Find a Co-signer or a Co-borrower with a Better Credit Score
When approaching personal loan providers, showing them you can repay the debt in the set loan term is crucial. You can find a co-signer or co-borrower with a better credit score. Most lenders have minimum credit score requirements that may stop you from applying for a specific loan amount. You can improve the situation by using a co-borrower’s credit score.
Consider a Smaller Loan Amount
Before applying for a co-signed loan, assess your financial situation and decide what loan amount you need to cover your credit card debt, for example. You should opt for the smaller loan amounts to ensure you can repay the loan on time.
Compare Interest Rates, Origination Fees, and Penalties
When gathering the loan offers, check the interest and origination fee. Personal loans with a co-signer may sometimes have additional fees, such as a prepayment penalty, even for good credit scores.
Avoid Unsecured Loans
Unlike a secured personal loan with a co-signer, an unsecured loan may come for higher interest rates even if you bring a co-signer. Usually, unsecured personal loan borrowers can’t qualify for more significant loan amounts due to their financial situation or minimum credit score requirement.
Eligibility Criteria to Meet When Applying for a Co-signer Personal Loan
Before applying for personal loans with a co-signer, you must meet specific requirements to make you eligible for these products. They can vary, but the basic eligibility criteria are as follows:
Age: be 18 years old and above; Identification: have a valid ID card; Residence/citizenship: be a permanent residence or a US citizen; Banking data: have an active checking account; Contact details: have a valid phone number and email address.
How to Get a Personal Loan with a Co-signer?
It’s easy to get personal with a co-signer if you follow the correct steps. 15M Finance presents you with the main stages of getting personal loans with a co-signer and makes your debt consolidation 100% convenient:
- Check your credit score. If it’s in bad shape and you need a more significant loan amount, find a co-signer to help you prequalify for secured loans.
- Compare rates and fees before you accept any loan offers. Choose one that completely suits your financial needs.
- Submit the loan application. Fill out the empty spaces not only with your personal information but also include your co-signer. It’ll show lenders you are worthy of trust and can repay the loan on time.
- Wait for the loan approval decision. If it’s approved, you can access the loan within one business day.
Where to Get the Best Personal Loans with Cosigners?
You can choose your bank, credit union, or operating lender to obtain the best personal loan with cosigners. If you can’t find a trusted financial institution, choose 15M Finance. By pre-qualifying on our platform, you can connect with hundreds of direct lenders available in your state. Dealing with us is free, and no minimum credit score requirements exist. You can apply for a co-signed personal loan and get the funds within 24 hours of approval.
Frequently Asked Questions
Is it hard to receive approval for a loan with a cosigner?
No, because you show the lender you can repay the loan on time by adding a co-signer, and another person’s credit score secures your loan.
How does a co-signer affect your credit?
A co-signer doesn’t affect your credit score. Taking out a personal loan with a co-signer or on your own will have the same initial impact on your credit. If the lender performs a hard credit check, it can improve your credit score by at least five points.
What is the co-signer’s credit score requirement to get a personal loan?
The credit score requirements may vary by lender, but the common is 670 or higher.
Will a co-signer pay the loan if I can’t do it?
If you can’t afford to repay the loan on time, both your and your co-signer’s credit scores may decrease in time. As you both are responsible for covering the debt, the lender will request to repay it.
What is the time frame for the co-signer to stay on the personal loan?
A co-signer must stay on a loan during the whole repayment term. It secures the loan and makes the primary borrower more responsible for timely covering the debt.
