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Best Personal Loans for Co-Signers & Co-Borrowers

Having a co-signer or co-borrower can improve your chances of approval and may get you a lower rate.

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Personal loans can be a great choice if you need money quickly, as they generally have fixed rates, and lenders can disburse these loans as soon as one day after approval. Funds can be used for nearly anything and cover a range of unexpected expenses, including medical bills, home or car repairs, and vet bills. You can also use a personal loan for a planned cost like a wedding or debt consolidation

While personal loans are a fast funding option with fixed rates, many lenders require that borrowers have good credit to get approved. Those with fair credit might be able to qualify with some lenders too, but generally, they’ll get a higher interest rate. 

This isn’t great news if you’ve got fair or poor credit. But there’s a silver lining: With certain lenders, you may be able to apply with a co-signer or co-borrower to increase your odds of getting approved for a personal loan with a decent interest rate.

Here’s what a co-signer is, how co-signing works, and some top lenders that allow co-signers and co-borrowers on loan applications.


What Is a Co-Signer?

A co-signer serves as support to a borrower seeking a loan. Their credit history is considered along with the primary borrower’s credit, and if the loan application is approved, they agree to pay it back if the primary borrower fails to make their payments. Co-signers don’t receive any of the loan funds. 

Generally, a co-signer is a trusted friend or family member with a stronger credit profile than the primary borrower. For instance, a parent might agree to co-sign a loan for their new college graduate with limited credit. Or one spouse with excellent credit might co-sign a loan for their partner who’s working to improve their credit. 

Co-Signer vs. Co-Borrower (or Joint Applicant)

mother and son working on finances
iStock

Joint applicants, also called co-borrowers or co-applicants, are named on the loan and share equal responsibility for the monthly payments. On the other hand, co-signers only serve as a guarantor for the loan, agreeing to repay it if a borrower defaults.

While co-signers and joint applicants can both help if a borrower has less-than-stellar credit, their responsibilities are different.

  • Co-signer: The co-signer is legally responsible for paying off the debt if the borrower defaults, but is not legally entitled to loan proceeds.
  • Co-borrower or joint applicant: The co-borrower benefits from the loan proceeds and has a joint responsibility in making loan repayments. For example, you might decide to apply for a joint loan with your spouse so you can both access the funds to pay for a home renovation.

Determining whether you want a co-signer and co-borrower will come down to how involved you want the individual to be and how invested they are in the loan.

What Are the Benefits of Having a Co-Signer?

  • Improve chances of loan approval
  • May qualify for lower rates
  • May qualify for higher loan amount
  • Helps both parties build credit with on-time payments

Borrowers with poor or fair credit could benefit from working with a co-signer with better credit, as lenders will consider your co-signer’s credit profile in addition to yours. If they have strong credit, you could qualify for a larger loan or better rates and terms with a co-signed loan than you would on your own. 

A lower interest rate can significantly affect how much you’ll pay over the life of your loan. For instance, if you qualified on your own for a 15% interest rate on a $10,000 personal loan with a five-year term, you’d pay $4,274 in interest over your repayment term. If you used a co-signer and qualified for a 10% interest rate with the same amount and loan term, you’d pay just $2,748 in total interest.

Best Personal Loans That Allow Co-Signers

If you’re interested in a co-signed personal loan, confirm that your lender offers this option before applying. Unfortunately, not all lenders do. To help you compare options, here are some of the best personal loans that allow co-signers. 

Loan results will vary based on creditworthiness, loan purpose, loan amount, and other factors.

Mariner Finance

  • Loan Amount: $1,000 – $25,000
  • APR Range: 18.99% – 35.99%
  • Loan Terms: 1 – 5 years
  • Credit Score: None

Those with bad credit may find personal loans from Mariner Finance accessible, but APRs can be high compared to other lenders.

Pros
  • Has physical branches
  • Multiple ways to apply
  • Accessible for bad credit borrowers
  • Low minimum loan amount
  • Joint and co-signed loans
Cons
  • Maximum loan amount is only $25,000
  • Loans over $15,000 are only available through physical branches
  • High minimum APRs

Mariner Finance has physical branches in 28 states, and borrowers can choose to apply for a personal loan in person, online, or over the phone. It’s also one of the few lenders that offers cosigned personal loans. While Mariner doesn’t disclose its minimum credit score requirements, a representative indicated that they consider factors like your credit history and income in lending decisions. So you may not necessarily need great credit to get approved.

Navy Federal Credit Union

  • Loan Amount: $250 – $50,000
  • APR Range: 7.49% – 18.00%
  • Loan Terms: 3 – 5 years
  • Credit Score: None

Personal loans from Navy Federal Credit Union come with no origination fees and can be a good fit for borrowers with less-than-ideal credit.

Pros
  • Fast funding available
  • Minimum loan amounts as small as $250
  • Lengthy repayment terms up to 180 months for home improvement loans
  • Co-signer option available
  • No origination fee
Cons
  • High minimum loan amounts for longer-term loans
  • Need to be a member to get a loan

Navy Federal operates around 350 branches near military bases around the country. It’s open to anyone with ties to the military or their family members, including active-duty servicemembers, civilian contractors, and veterans.

In addition to offering cosigned personal loans for borrowers with less-than-perfect credit, Navy Federal Credit Union also offers secured personal loans. It’s worth putting this lender on your shortlist if your credit isn’t great and you’re looking to compare loan options. 

However, membership is required to get a loan from Navy Federal, and unfortunately, it’s not available to everyone. To qualify, you need to be a veteran, active-duty service member, Department of Defense personnel, or eligible military family member. 

Borrowers won’t pay an origination or prepayment fee, and funding can be available as quick as the same day.

Best Personal Loans That Allow Co-Borrowers

Alternatively, you may want to consider working with a co-borrower if you have poor credit. Co-borrowers share responsibility for the loan and benefit from the funds received. Here are some lenders that allow co-borrowers if you’re considering this option.

Loan results will vary based on creditworthiness, loan purpose, loan amount, and other factors.

LightStream

  • Loan Amount: $5,000 – $100,000
  • APR Range: 5.99% – 21.49%
  • Loan Terms: 2 – 12 years
  • Credit Score: 660 or higher

LightStream is an online lender offering no fees and low-rate personal loans for several purposes.

Pros
  • Relatively low APRs
  • No origination fees, no late fees
  • Personal loans up to $100,000
  • Autopay discount
  • Joint applications allowed
Cons
  • No physical branches
  • Rates and terms vary by loan purpose
  • No soft pull prequalification

Lightstream is Truist’s online lending division, formed in 2019 after SunTrust and BB&T merged. Offering personal loans for several purposes, including debt consolidation, medical expenses, home improvement, weddings, car purchases, and more, LightStream could be worth considering for those seeking flexibility. 

The lender offers relatively low rates compared to competitors, including autopay discounts. Eligible borrowers can get approved for personal loans from $5,000 to $100,000, and loan terms range from 24 to 144 months. Of course, the rate and term you get will depend on the specific loan purpose.

Its personal loans also have no origination fees, which can help keep borrowing costs low. However, borrowers will likely need a credit score of 660 to get approved for a Lightstream personal loan. 

Overall, it’s a good lender to add to your shortlist if you’re looking for flexible funding, no fees, and a low APR. Lightstream may also disburse loans as soon as the same day you’re approved, making this lender a decent choice if you need fast funding.

Upgrade

  • Loan Amount: $1,000 – $50,000
  • APR Range: 7.96% – 35.97%
  • Loan Terms: 2 – 7 years
  • Credit Score: 560 or higher

Upgrade offers flexible terms for personal loans and is accessible to borrowers with less-than-stellar credit profiles.

Pros
  • Accessible to borrowers with bad credit
  • Flexible loan terms
  • Joint applications allowed
  • Direct payment to creditors
  • Secured loan options
Cons
  • Has origination fees from 1.85% to 8%
  • No physical branches
  • Higher APRs than some competitors

Upgrade offers personal loans up to $50,000 for qualifying borrowers and is accessible to those with not-so-ideal credit scores. The low loan minimum of $1,000 also makes it an easy choice for those with small financing needs. However, borrowers in certain states will be subject to higher minimum loan amounts. If you live in Massachusetts, Upgrade’s minimum loan amount is $6,400.

While other lenders may offer longer repayment terms of up to 144 months, those are typically reserved for certain loan purposes. Upgrade has repayment terms of 24 to 84 months for eligible borrowers, no matter what expense you’ll be covering. This flexibility can be useful, especially if you’d prefer a longer timeframe to pay off your loan. 

With this lender, you can expect to pay an origination fee between 1.85% and 8%. Borrowers can view their rate before applying without impacting their credit score. 

Overall, Upgrade is worth considering if you’re looking for a lender that offers multiple banking products and loans with competitive rates and flexible terms.

SoFi

  • Loan Amount: $5,000 – $100,000
  • APR Range: 7.99% – 23.43%
  • Loan Terms: 2 – 7 years
  • Credit Score: 680 or higher

SoFi is an online lender known for its lack of fees and high loan maximum.

Pros
  • No origination fees and no late fees
  • Loans up to $100,000
  • Unemployment protection available
  • Rate discounts
  • Co-borrower allowed
Cons
  • No physical branches
  • High minimum loan amount

SoFi offers a competitive personal loan product that boasts no origination fees, no late fees, and a high maximum loan amount of $100,000. SoFi is one of only a handful of lenders offering loans as large as $100,000. If you need a substantial loan to cover a considerable expense, like a home renovation, SoFi’s high maximum can be a strong option. Its repayment terms range from 24 to 84 months.

One standout feature of SoFi is that it offers unemployment protection, which might allow you to pause payments if you lose your job. This is a unique offering that sets it apart from competitors.

SoFi also lets you view your rate without impacting your credit score. While doing a soft credit pull is relatively common, it’s still worth mentioning because some lenders require a hard inquiry before they provide a rate. Those who decide to formally apply will likely need a strong credit score to get approved for a SoFi personal loan. 

How Does Your Loan Impact the Co-Signer’s Credit?

Your loan may have a negative or positive impact on your co-signer’s credit, depending on a few factors.

It might negatively impact their credit if/when:

  • Your lender runs their credit: Both you and your co-signer will be subject to a hard credit check when you apply for a loan. This could result in a temporary small dip in your credit scores, though generally not more than five points. 
  • You make late payments: Making late payments or missing payments entirely could hurt your credit score and your co-signer’s. 
  • Your account is sent to collections: Falling behind on payments could result in your account being sent to a collections agency. This will harm both your and your co-signer’s credit scores.

But your loan can also have a positive effect on your co-signer’s credit score, too.

Here’s when it may help positively impact their credit:

  • You make payments on time: Just as late or missed payments hurt your credit score, on-time payments can improve it. The same is true for your co-signer’s credit score.
  • Your new account helps their credit mix: As its name implies, your credit mix is the combination of different account types on your credit report—for instance, credit cards, mortgages, and other loans. Generally, it’s good for your credit to have different types of credit accounts, assuming you can manage payments. 


FAQs

Can you still be denied a loan if you use a co-signer?

It’s possible to be denied a loan even if you use a co-signer. Qualifying criteria vary from lender to lender, which means one lender might have stricter requirements for borrowers than another. If you choose to use a co-signer, compare lenders and research their credit score, income, and other requirements before applying.

Does having a co-signer make it easier to get approved for a loan?

Having a co-signer may improve your chances of getting good loan offers, especially if that person has excellent credit and you have bad credit. That’s because your lender will consider both your credit and your co-signer’s credit when deciding whether to approve your loan. Having someone with excellent credit in your corner could help you qualify for a larger loan amount or a better interest rate or loan term.

Who gets the credit on a co-signed loan?

A co-signed loan can affect both the borrower’s and the co-signer’s credit scores. The impact can be positive or negative, depending on a few factors. If the borrower can keep up with monthly payments, it’ll likely improve the credit scores of both. But if the borrower defaults, it’ll harm credit scores of both people. 

While the co-signer guarantees the loan for the borrower, they do not receive any loan proceeds, and the borrower is responsible for making monthly payments.

Can you get a loan with no credit and no co-signer?

It’s possible to get a type of loan with no credit and no co-signer, but your options are more limited. Your best bet is likely a credit-builder loan from a local bank or credit union. These are a type of secured loan that requires a deposit. You then pay your deposit amount over time, and once the balance is paid off entirely, the loan funds are disbursed to you. This can be a useful way to establish or rebuild bad credit. 

Another option would be credit cards with 0% intro APR promotions, which is essentially an interest-free loan on your spending as long as you can pay off the balance every month.

While we work hard on our research, we do not always provide a complete listing of all available offers from credit-card companies and banks. And because offers can change, we cannot guarantee that our information will always be up to date, so we encourage you to verify all the terms and conditions of any financial product before you apply.

Jess Ullrich
Jess Ullrichhttps://www.linkedin.com/in/jessicaullrich/
Jess is a freelance personal finance writer. She's been creating financial and business content for over a decade. Before venturing into freelance writing, Jess was on the editorial teams at Investopedia, The Balance, and FinanceBuzz. She's created content across several verticals, including budgeting, credit, debt, insurance, investing, loans, and side hustles. In her spare time, you can find Jess reading about money, working in her garden, or spending time with family.

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