Lenders That Accept Personal Loan Co-Signers

Loans, Personal Loans

A co-sign loan may be an option for borrowers who don’t qualify for a loan on their own. Here are typical annual percentage rates for some lenders that let you apply with a co-signer.

 Typical APR rangeLoan amounts
LightStream
4 stars out of 5
2.24% - 17.54% (2.19% - 17.49% with autopay)$5,000 - $100,000
Backed
4 stars out of 5
2.90% - 15.99%$3,000 - $25,000
Lending Club
4.5 stars out of 5
5.99% - 35.89%$1,000 - $40,000
Wells Fargo
3.5 stars out of 5
6.99% - 23.99%$3,000 - $100,000
FreedomPlus
4.5 stars out of 5
7.93% - 29.99%$10,000 - $35,000
OneMain
4 stars out of 5
12.99% - 35.99%$1,500 - $25,000
Mariner
3 stars out of 5
24.00% - 36.00%$1,000 - $25,000

What is a co-sign loan?

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. The co-signer acts as a form of insurance for the lender, promising to pay the loan amount if you default.


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However, 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 director of business development.

LightStream_logo

APRs: 2.19%-17.49% (with autopay), 2.24%-17.54% (without autopay)

Loan amount: $5,000 to $100,000

Loan terms: 2-7 years

Minimum credit score: 680

Time to funding: Same day, with option of up to 30 days from approval

Fees: None

 

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.

FreedomPlus-logo-814x180

APRs: 7.93%-29.9%

Loan amount: $10,000 to $35,000

Loan terms: 2-5 years

Minimum credit score: 640, but generally 700+

Time to funding: Three days, with approval in 1 day

Fees: Origination fee of 1.38% to 5%, included in APR. Late fee 5% of payment or $15, whichever is greater

 

Backed: Low rates for well-qualified co-signers

Backed’s starting interest rates are among the lowest of online lenders, and it encourages millennial borrowers with thin credit to have a friend or family member “back” them on a personal loan. If your co-signer earns at least $50,000 and has a credit score of 720 or higher, Backed may be a good fit.

Backed currently operates only in Arizona, Arkansas, Florida, New Jersey, New York and West Virginia.

Backed logo for inline use

APRs: 2.9%-15.99%

Loan amount: $3,000 to $25,000

Loan terms: 24-48 months

Minimum credit score: 660 if applying without co-signer; 720 for co-signer

Time to funding: 2 to 4 business days

Fees: Origination fee of 0.8%-2.0%. Late fee of $20. Personal check processing fee of $10. Unsuccessful payment fee of $15.

Lending Club: Peer-to-peer loans for joint borrowers

Lending Club, 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.

LendingClub-box

APRs: 5.99%-35.89% (4.99% with excellent credit)

Loan amount: $1,000-$40,000

Loan terms: 3 or 5 years

Minimum credit score: 600

Time to funding: Usually 7 days

Fees: Origination fee 1% to 5% of loan amount; fees for late payment, unsuccessful payment and personal check use

OneMain Financial and Mariner Finance: 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.

Mariner Finance has a low minimum credit score requirement of 600 and lets applicants use a co-signer to boost their approval odds. Mariner also considers applicants who have filed bankruptcy. Mariner has branches in more than 20 states and requires an in-person visit to complete the loan application process. (Its subsidiary, Pioneer Credit, has branches in eight states.)

OneMain_RGB

APRs: 12.99%-35.99%

Loan amount: $1,500-$25,000

Loan terms: 3-5 years

Minimum credit score: None

Time to funding: From same day to up to three days

Fees: Origination and late fees; both vary by state

logo-for-nw-mariner-finance

APRs: 24.00%-36.00%

Loan amount: $1,000 to $25,000

Loan terms: 1-5 years

Minimum credit score: 600

Time to funding: Typically one day

Fees: Origination fee, late fee, personal check fee and returned payment fee vary by state

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. (Pricing example does not 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.

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Amrita Jayakumar and Jeanne Lee are staff writers at NerdWallet, a personal finance website. Email: ajayakumar@nerdwallet.com or jlee@nerdwallet.com. Twitter: @ajbombay or @jlee_jeanne.

Updated May 24, 2017.


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