Online Personal Loans with a Cosigner: The Best Lenders Compared

What is a Cosigner Loan?

If you have less than ideal credit or no collateral to put down, it can be difficult to get a personal loan with a low interest rate. This is where cosigning a loan can really help.

With a low credit score (620 or lower), you stand to face some real reluctance, if not just flat out rejection, with many lending houses. Even if you are approved you stand to pay a high interest rate of 15% or higher. If you have a cosigner with good credit and stable income though, you can apply for a loan using the cosigner as an insurer of sorts for the loan, allowing you to attain a loan with conditions that are easier to keep up with.

A cosigner agrees to cover the payments if you default, serving as collateral for the loan.


Lenders That Accept Personal Loan Cosigners

A number of online lending companies provide cosigned loans, here’s a look at 5 of the main companies:

Loan ProviderLoan AmountAPRTerms 
LendingClubUp to $40,0005.99%-35.89%36-60 monthsGet Offer
LightStreamUp to $100,0004.99%-14.24%24-84 monthsGet Offer
Freedom PlusUp to $35,0004.99%-29.99%3-60 monthsGet Offer
OneMainUp to $25,00018.49%-35.99%24-60 monthsGet Offer
CompareFirstUp to $50,0002.99%-35.99%12-60 monthsGet Offer

LendingClub

1. LendingClub

Best for: Cosigners with credit score of 600+  

♦ Apply online in minutes ♦ Get your money in as little as few days ♦ Make fixed monthly payments 

  • Min. Credit Score:  600
  • APR:  5.99% - 35.89%
  • Loan Amount:  $1,000 - $40,000
  • Loan Term:  3 to 5 years
  • Time to Funding:  Usually up to 7 days

One of the biggest peer-to-peer companies in the industry, LendingClub​ matches borrowers with a wide range of lenders, including those who provide cosigned loans. The loans you can find on LendingClub range from $1,000 to $40,000, with APRs starting as low as 5.99%. The cosigner only needs to have a credit score of 600 (“poor” is 550-649) and the borrower only needs as high as 540.

Visit LendingClub


 LightStream

2. LightStream

Best for: Joint applications for cosigned loans

♦ Low rates ♦ Same day funding ♦ Loan amounts up to $100K ♦

  • Min. Credit Score:  660
  • APR:  4.99% - 14.24%
  • Loan Amount:  $5,000 - $100,000
  • Loan Term:  2 to 7 years
  • Time to Funding:  As soon as same day

The personal loan division of SunTrust Bank, LightStream​, is a good option for people looking for flexible loans ranging from $5,000 to $100,000. The company can provide loans within the same day, with APRs ranging from 2.49%-17.49%. And best of all, LightStream accepts joint applications for cosigned loans, as long as one of the applicants has excellent credit (750-850).

Visit LightStream


Freedomplus

3. FreedomPlus

Best for: Consolidating multiple loans into affordable payments

No hidden fees ♦ Same day approval ♦ Your rate will never increase ♦

  • Min. Credit Score:  640
  • APR:  4.99% - 29.99%
  • Loan Amount:  $10,000 - $35,000
  • Loan Term:  2 to 5 years
  • Time to Funding:  As soon as 2 days

If you’re looking to consolidate your loans, FreedomPlus​ has your number. The company was founded to help borrowers dig out of debt, and offers a wide range of personal loans from $10,000 to $35,000 with APRs from 4.99%-29.99%. FreedomPlus also provides personal loans for people with cosigners. Putting a co-signer with great credit on your loans can afford you a significant discount on your interest rate, dropping it down from 5-10%.

Visit FreedomPlus


OneMain Financial

4. OneMain

Best for: Personalized loans tailored to borrowers with cosigners

 No pre-payment penalty  ♦ Fixed rates and fixed payments ♦ Money as soon as same day ♦

  • Min. Credit Score:  None
  • APR:  17.59% - 35.99%
  • Loan Amount:  $1,500 - $25,000
  • Loan Term:  2 to 5 years
  • Time to Funding:  Same day up to 3 days

OneMain Financial​ prides itself on providing a personalized experience tailor-made for your needs, including with cosigned loans. The interest rates tend to be rather high, ranging from 18.49% to 35.99% for personal loans of $1,500 to $25,000. Borrowers with collateral can potentially take out loans for even higher.

Visit OneMain


Compare First

5. CompareFirst

Best for: Simple application and varied interest rates

All FICO scores welcome ♦ High acceptance rates ♦ Safe and secure ♦

  • Min. Credit Score:  590
  • APR:  2.99% - 35.99%
  • Loan Amount:  $2,000 - $5,000
  • Loan Term:  1 to 5 years
  • Time to Funding:  Usually up to 7 days

CompareFirst​ facilitates personal loans - cosigned and otherwise - ranging from $1,000 to $50,000 for terms of 12-60 months and a wide variety of interest rates. The company also has a simple, straightforward application process that should only take a few minutes, and a website that can walk you through any troubleshooting.

Visit CompareFirst

 

Getting a cosigner can help secure a loan

Why Apply for a Personal Loan With a Co-Signer?

The main reason to pursue a personal loan with a cosigner is that you may be able to qualify for a loan that you wouldn't receive otherwise. If your cosigner has better credit than you and reliable income, then together you can qualify for a loan with a much friendlier interest rate that can really help your bottom line.

If you enter into a co-signed loan, you can repair your credit history and improve your score by paying off the loan. This can help you establish a positive credit history, and the co-signer can also build more good credit through the shared loan.

If you have other outstanding loans with high interest rates, a co-signed loan can allow you to take out a big enough amount of money to pay off your higher interest loans, bringing all of your debt under one lower interest rate.


What Are the Risks?

The cosigner is on the hook for the loan so if you miss the payments they stand to take a serious hit to their credit rating. With a cosigned loan you increase the number of people at risk of financial harm if the loan is not paid on schedule.

If the cosigner’s credit isn’t much higher than yours, then the terms you get might not be good enough to offset the risk you’re asking the cosigner to undertake.

A hard credit history pull could potentially harm the co-signer's credit from the get-go.


How Does it Work?

When you have a cosigner loan, there is less risk involved for the loan provider, therefore they are able to offer better rates and lower monthly repayments. 

 With CosignerWithout Cosigner
Loan Amount$10,000$10,000
Loan Term5 years5 years
Interest Rate10%15%
Monthly Repayments$212$239
Total$12,748$14,274

A $10,000 personal loan at 15% interest over 5 years will cost $237.90/month, and after 60 months you will have paid a total of $14,274 by end of term. The same loan with a cosigner, brought down to a friendlier 10% interest rate, will cost $212.47/month for a total of $12,748.20 by the end of the term.


How Do You Find a Cosigner?

Mixing family and business is... complicated. Typically a cosigner will be someone close to you - a parent, sibling, or even an in-law. This can be a rather uncomfortable cloud hanging over the relationship, and if you default, it could harm your personal relationship with the cosigner. Therefore, when choosing a cosigner, make sure it's someone you trust and that you have a good relationship with. 

Choosing someone you're close to is important, but you also need to make sure that they are actually financially stable and will be able to help you out if you run into difficulties. Take the time to ask them about their financial status to confirm that they indeed have a reasonable credit score and solid borrowing history. While this can be a sensitive subject, it shouldn't be a problem if the person you choose is either a family member, close friend or a trusted work colleague. 


What Now?

Bad credit can get you down, but by no means does it have to be a deal-breaker if you’re looking for a personal loan. With a cosigner in hand you can receive a personal loan that can help you consolidate debt or just give you a little more breathing room financially. So take a look around and find a lender with terms that work for you.

See our in-depth reviews of the top personal loan providers for more information.

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