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Lenders That Accept Personal Loan Co-Signers

May 22, 2019
Loans, Personal Loans
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A co-sign loan may be an option for borrowers who don’t qualify for a loan on their own. Adding a co-signer’s credit history and income to a loan application can increase your chances of qualifying and get you more favorable terms.

Here’s what to know and where to find co-sign personal loans:

» MORE: Compare estimated rates from multiple online lenders

Here are typical annual percentage rates for some lenders that let you apply with a co-signer.

 Typical APR rangeLoan amountsGet started
LightStream
5 stars out of 5
3.99% - 16.99% (with autopay)$5,000 - $100,000
at LightStream
Upgrade
4 stars out of 5
7.99% - 35.89%$1,000 - $50,000
at Upgrade
LendingClub
4.0 stars out of 5
6.95% - 35.89%$1,000 - $40,000
at LendingClub
Wells Fargo
4.0 stars out of 5
7.49% - 24.49%$3,000 - $100,000
on NerdWallet
FreedomPlus
3.5 stars out of 5
5.99% - 29.99%$10,000 - $35,000
at FreedomPlus
Laurel Road
5 stars out of 5
8.01% - 16.30% (with autopay)$1,000 - $45,000
at Laurel Road
OneMain Financial
4 stars out of 5
16.05% - 35.99%$1,500 - $30,000
at OneMain
Click “Check Rate” to pre-qualify and receive a personalized rate from multiple lenders on NerdWallet.


What is a co-sign loan?

As its name suggests, a co-signed loan has two signatures: yours and the co-signer’s, who acts as a form of insurance for the lender, promising to pay the loan amount if you default.

If you miss a payment, you risk hurting both your credit score and that of the co-signer. You can also ruin your relationship with the co-signer. Co-signers take on equal responsibility for the loan.

Co-signers are common with car loans or student loans, but some personal loan providers — banks, credit unions and a few online lenders — also allow co-signers.

Banks and credit unions that allow co-signers

Most major banks no longer offer personal loans, but Wells Fargo and Citibank still do. Both banks have the option of adding a co-signer. You need to be an existing customer to apply, and you must visit a Wells Fargo or Citibank branch to complete the paperwork for the loan.

Credit unions are a good first stop for any type of personal loan, because they have low interest rates and often work with borrowers to make a loan affordable, even if the borrower has bad credit. Most credit unions allow co-signers on unsecured loans (also called signature loans) and accept online applications. The maximum APR that federal credit unions can charge is 18%.

Online lenders that allow co-signers

A handful of online lenders let borrowers add a co-signer.

Lightstream: Loans for co-signers with excellent credit

LightStream, a lender with high credit standards, allows joint applications. The company looks at combined income and debt to check whether borrowers meet its underwriting requirements. But only one of the applicants needs to have excellent credit to qualify for a loan, according to Todd Nelson, LightStream’s business development officer.

5.0 NerdWallet rating

•APR: 3.99% - 16.99% (with autopay)

•Loan amount: $5,000 - $100,000

•Loan terms: 2 to 7 years

•Minimum credit score: 660

•Time to funding: As soon as the same day

•Fees: None

Read our review

Check Rate Click “Check Rate” to pre-qualify on NerdWallet.

FreedomPlus: Rewards co-signers with good credit

FreedomPlus gives borrowers a lower interest rate if they add a co-signer with good credit. For example, if you initially qualify for a loan at 15.99% APR, adding a co-signer might discount that rate to 10.99%. Forty percent of FreedomPlus borrowers have co-signers, according to the company.

3.5 NerdWallet rating

•APR: 5.99% - 29.99%

•Loan amount: $10,000 - $40,000

•Loan terms: 2 to 5 years

•Minimum credit score: 640, but generally 700+

•Time to funding: 3 days

•Fees: Origination fee of 0% to 5% of loan amount; fees for late payment, unsuccessful payment and personal check use

Read our review

Check Rate Click “Check Rate” to pre-qualify on NerdWallet.

Upgrade: loans for co-signers with strong cash flow

Upgrade allows joint applications to help with loan approval and to offer larger loan sizes. The joint applicant must meet its requirements, which includes a minimum credit score of 620 and monthly free cash flow of at least $800.

4.0 NerdWallet rating

• APR: 7.99% - 35.89%.

• Loan amount: $1,000 - $50,000.

• Loan terms: 3 or 5 years.

• Minimum credit score: 620.

• Time to funding: 24 hours.

• Fees: Origination fee of 1.5% - 6% of loan amount.

Read our review.

Check rate Click to pre-qualify on NerdWallet.

Laurel Road: co-signer loans for debt consolidation

Laurel Road allows co-signers to increase your chances of qualifying or to get you more favorable loan terms. The lender has no origination fees, low rates and offers direct payment to creditors, which makes it an option for debt consolidation.

5.0 NerdWallet rating

• APR: 8.01% - 16.30% (with autopay).

• Loan amount: $1,000 - $45,000.

• Loan terms: 3 to 5 years.

• Minimum credit score: 700.

• Time to funding: 5 business days.

• Fees: No origination fee; late fee is the lesser of 5% of payment or $28.

Read our review.

Check rate Click to pre-qualify on NerdWallet.

LendingClub: Peer-to-peer loans for joint borrowers

LendingClub, a large online lender, allows joint applications. The marketplace lender allows a maximum combined debt-to-income ratio of 35% for joint applications. One borrower must have a minimum score of 600 or above, while the second borrower can have a credit score as low as 540.

4.0 NerdWallet rating

•APR: 6.95% - 35.89%

•Loan amount: $1,000 - $40,000

•Loan terms: 3 or 5 years

•Minimum credit score: 600, but borrowers average 699

•Time to funding: In as few as 3 days

•Fees: Origination fee of 1% - 6% of loan amount; fees for late payment, unsuccessful payment and personal check use

Read our review

Check Rate Click “Check Rate” to pre-qualify on NerdWallet.

OneMain Financial: Co-signer loans for bad credit

OneMain Financial makes loans to people with below average or bad credit and allows joint applications. OneMain has no minimum credit score requirement and offers same-day funding. You can start your application online, but to complete the process OneMain usually requires a visit to one of its more than 1,700 branches.

4.0 NerdWallet rating

• APRs: 16.05% - 35.99%

• Loan amount: $1,500-$30,000

• Loan terms: 2 to 5 years

• Minimum credit score: None, but borrowers average 600 to 650

• Time to funding: Same day

• Fees: Origination and late fees; both vary by state

Read our review

Check Rate Click “Check Rate” to pre-qualify on NerdWallet.

How a co-signer can help

For those with bad credit, the benefits of a co-signer can be significant. You may qualify for a loan you wouldn’t get on your own, and your interest rate and origination fee will be lower.

How much your rate falls depends on factors such as:

  • The co-signer’s credit score
  • Both your credit histories
  • Your combined debt-to-income ratio
  • The lender’s underwriting criteria

In an example of a real loan provided by FreedomPlus, a borrower with a FICO score of 630 and annual income of $30,000 was approved for a three-year, $10,000 loan with an interest rate of 18.49%. After adding a co-signer with a 720 credit score and annual income of $70,000, the interest rate dropped 10 percentage points.

 APRMonthly paymentTotal cost
Without co-signer18.49%$363.99$13,103.64
With co-signer8.49%$315.63$11,362.68

The borrower saved more than $1,700 over the life of the loan with the addition of a co-signer. (This pricing example doesn’t include fees.)

Is a co-signer the right option?

There are benefits and risks to co-signing a loan. Whether you’re the borrower or co-signer, understand co-signer responsibilities before you consider a joint personal loan.

You can check your interest rate without affecting either your credit or the co-signer’s credit at the time of application, but all lenders conduct a hard credit check on both applicants before they issue the loan. (A hard check affects your credit score.)

Lenders report positive and negative payment information to the credit bureaus, which has an impact on both your credit and, if you default, the co-signer’s.

As with all loans, the credit of both parties will improve with timely payments or suffer because of missed payments. Lenders aren’t required to keep co-signers in the loop, so it’s usually up to the co-signer to ensure that the borrower is making regular payments.

Next steps: Check rates on loans

First, check multiple lenders to see if you pre-qualify for a loan on your own and, if so, at what rate. If you don’t qualify, or if your rate is high, consider a co-signer loan.


Before you shop for a personal loan:

 


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