Best Personal Loans With a Cosigner in 2025
Get lower rates and better odds when you apply with a cosigner with good credit
Cosigner and co-borrower loans at a glance
What is a cosigner?
A cosigner is a second person who signs a loan agreement. This person has equal legal responsibility for repaying the loan. They can be a friend, family member or another trusted person.
Lenders take on less risk when two people are responsible for repayment, so getting a personal loan with a cosigner can make it much easier to qualify. This is especially true if the cosigner has good or excellent credit.
If the original borrower can’t pay back the loan, the lender can collect payment from the cosigner.
Cosigner vs. co-borrower
The terms cosigner and co-borrower are sometimes used interchangeably, but there are important legal differences.
Co-borrowers have the right to access the borrowed money, while cosigners don’t. But cosigners and co-borrowers are both responsible for payments, which means that missed payments will put their credit at risk.
Cosigners
- Responsible for payments
- Credit affected by late or missed payments
- Can’t access the borrowed money
- Less common for personal loans
Example: Parent cosigners don’t have the right to access student loan money marked for their child’s school expenses.
Co-borrowers or co-applicants
- Responsible for payments
- Credit affected by late or missed payments
- Can access borrowed money
- More common for personal loans
Example: If you and your spouse take out a home improvement loan to pay for a kitchen remodel, you can both legally access the funds at any time.
Most lenders only offer one option or the other, if they allow co-applications at all. The best way to know which option is better for you is to prequalify for a joint or cosigned loan with several lenders and choose the offer with the lowest rates and best terms for you.
What to know about using a cosigner
Applying for a personal loan with a cosigner comes with additional hoops to jump through. Here’s what you need to know.
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Cosigner qualifications
Most lenders require that both applicants meet their minimum eligibility requirements. Lenders will consider factors like income, credit score and credit history. Some lenders may even require that co-applicants live at the same address. -
Application timeline
Using a cosigner or co-borrower may add extra time to the personal loan application process, since the lender will be evaluating two applicants instead of just one. -
Cosigner release
Lenders may allow you to release your cosigner from your loan contract after a certain period of time and a history of on-time payments. If your lender doesn’t offer cosigner release, consider refinancing your loan instead.
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Risks of using a cosigner
Before you decide to cosign a personal loan, it’s important to know about the downsides. Here’s what you need to know about the risks of using a co-applicant on a loan:
Damage to credit
Each applicant is legally responsible for the loan, so missing payments or going into default will hurt the credit of both parties.
Legal consequences
If you stop making payments, your debt will eventually go to collections and one or both of you could be sued by a debt collector.
Hard credit pull
Lenders typically run a hard credit inquiry when you apply for a loan. This can cause a small, temporary dip in the credit scores of both the original borrower and the cosigner.
Harder to qualify for future loans or credit
Cosigning a loan can increase your debt-to-income ratio, which may make it difficult to take out more credit until the cosigned loan is paid off.
Strained relationship
If you have trouble repaying a loan, financial repercussions may not be the only fallout. Your relationship with your cosigner could suffer as well.
Frequently asked questions
Cosigners can help you get lower rates, more money and better odds of approval — but only if your cosigner has good or excellent credit.
Yes, adding a cosigner increases your odds of approval. Cosigners lower the lender’s risk, since two people are accountable for repayment instead of just one. If your cosigner has good credit and a reliable credit history, this can make it even easier to qualify for a loan.
The credit score you need for a personal loan depends on the lender, but aim to have a cosigner with a credit score of 670 or higher. This can make it easier not only to get approved for a personal loan but also to get better offers that can save you money.
Consider getting a personal loan with a cosigner if you want:
- Better approval odds
- A large loan
- Lower interest rates
Note that your cosigner will need good or excellent credit to help you achieve these goals.
Missing payments will damage both your credit score and your cosigner’s. If neither of you make payments, your lender will eventually send your loan to a collection agency.
Consider debt relief options if you’re struggling to make payments.
Our methodology
We reviewed more than 30 lenders to determine the best six personal loans with a cosigner or co-borrower. To make our list, lenders must offer cosigner or co-borrower loans with competitive annual percentage rates (APRs). According to our standardized rating system, the best cosigner loans come from First Tech Federal Credit Union, Laurel Road, PenFed Credit Union, Prosper, SoFi and Upgrade. We prioritized lenders based on the following factors:
Accessibility: Lenders are ranked higher if their personal loans are available to more people and require fewer conditions. This may include lower credit requirements, wider geographic availability, faster funding and easier and more transparent prequalification and application processes.
Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like free wealth coaching.