Almost 7 out of 10 personal loan borrowers said their loans helped them accomplish their financial goals, according to a 2017 survey by Discover Personal Loans.
To get a personal loan, however, you first have to apply and get approved. One of the most common obstacles applicants face is credit requirements. Many personal loan rejections result from poor credit.
If you have bad credit, you might be able to get personal loans for bad credit — with the help of a cosigner or co-applicant. Here’s what you need to know about applying for personal loans with a co-applicant or cosigner.
4 questions to ask before getting personal loans with a cosigner or co-applicant
Is it easier to get a loan with a cosigner?
In short, yes. When you apply for personal loans with a cosigner or co-applicant, you have a second person helping you meet the loan criteria and credit requirements. Here’s what you need to consider if you plan to apply with another borrower.
1. Does the personal loan accept a cosigner or co-applicant?
If you’re looking to use another borrower as your ticket to personal loans for bad credit, you’ll need to find lenders that allow cosigners or co-applicants.
The option to add a cosigner or co-applicant isn’t as common for personal loans as it is for other products, such as private student loans. So make sure to check the lender’s policy online or via customer service before applying.
2. Can your cosigner or co-applicant qualify for this personal loan?
You’ll need to make sure you’re getting a cosigner or co-applicant who can qualify for a personal loan.
After confirming the lender does offer personal loans with a co-applicant or cosigner, you’ll want to check out its credit requirements. Some lenders list personal loan requirements, such as a minimum credit score or minimum annual income, on their site. Usually, a good credit score to get personal loans will be at least in the mid-600s.
Your cosigner or co-applicant also can try to get a rate quote with a soft credit check, which won’t ding their credit. The lender will tell your co-borrower whether they can qualify for the personal loan and what personal loan rates the lender is likely to extend.
3. Is your cosigner or co-applicant fully aware of their responsibilities?
A personal loan cosigner or co-applicant is as legally responsible for this debt as you are. That means:
- It affects both your credit scores. The loan will show up on your credit report as well as your cosigner’s or co-applicant’s. So any missed payments or delinquencies will damage both your credit scores.
- Your co-borrower must repay the debt if you don’t. If you’re unable to repay this debt for any reason, your cosigner or co-applicant would be responsible for paying back the funds. Talk through these possibilities to make sure you both understand what sharing this debt will look like.
4. Does this personal loan’s features fit your needs?
Lastly, check the terms of the personal loan to make sure it will fit your needs. Some key features to look for include:
- Personal loans in the amount you need to borrow, whether that’s $1,000 or $100,000.
- Personal loan terms that match your goals, whether that’s getting the most affordable monthly payments or paying off the debt as fast as possible. Use our personal loan calculator to see how different loan amounts, rates, and lengths affect your repayment.
- Low personal loan fees and interest rates. Some personal lenders charge origination fees, and they’ll offer different rates. Compare advertised costs as well as your customized rate quotes to find the best deal for you.
Top personal loans that offer a co-borrower option
To get your search for the right lender started, we’ve highlighted two great options: Citizens Bank and LendingClub. Both lenders allow borrowers to co-apply for personal loans.
Citizens Bank personal loans
If you have poor credit or an income below the $24,000 annual minimum Citizens Back requires, a co-applicant can help you get the personal loan you need.
According Citizens Bank, “The final interest rates and loan terms offered will be based on the higher of the two FICO scores [of the co-applicants].” So if your co-applicant has a higher FICO score, that could qualify you for the best personal loan rates Citizens Bank offers.
Citizens Banks personal loans are also a great option if you need to borrow fast. The lender claims on its site that many loans are funded within two days.
Here are a few other details about Citizens Bank personal loans you should consider:
- Fixed interest rates and rate discounts of up to 0.50%
- No origination or application fees and no prepayment penalties
- Personal loan amounts ranging from $5,000 to $50,000
- Loan terms of three, four, five, six, and seven years
- Soft credit check rate estimate for both applicants
- Fast loan application processing and fund disbursement
- Eligibility requirements include a “reasonably strong credit history” and minimum income of $24,000
LendingClub personal loans
With flexible underwriting criteria and features, LendingClub is a smart place to find personal loans for bad credit.
LendingClub is a peer-to-peer lending platform that facilitates loans funded by real people to real people. It has a minimum credit score requirement of just 600, which means it accepts and considers applicants with poor or fair credit.
“LendingClub offers certain applicants the option to apply for a loan together,” said Alia Dudum, consumer debt expert for LendingClub. The option to apply jointly for a LendingClub personal loan makes this product even more accessible for borrowers.
“To qualify for a joint application loan, a number of factors of either or both applicants are considered,” Dudum said, “including but not limited to information provided on the joint application, information provided by credit bureaus, credit score(s), income, debt-to-income (DTI) ratio, credit history length, and recent credit history.”
A qualified co-applicant can strengthen your LendingClub personal loan application and increase your chances of getting your loan approved.
Here are some additional details on LendingClub personal loans:
- Fixed interest rates
- Origination fee of 1 percent to 6 percent, charged upon disbursement
- No prepayment penalties or application fees
- Personal loan amounts of $1,000 to $40,000
- LendingClub personal loan terms of three and five years
- Rate quotes with a soft credit check
If you need personal loans for bad credit, it might be because you mishandled debt repayment in the past. So while it’s easier to get a loan with a cosigner, that doesn’t automatically mean it’s a good idea.
Make sure you limit your personal loan amount to what you need and can afford to borrow. Lastly, have a plan to responsibly repay the personal loan you’ve taken out with your cosigner or co-applicant to avoid any mishaps.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||Rates (APR)||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
|7.73% – 29.99%||$1,000 - $50,000|
|6.28% – 14.87%1||$5,000 - $100,000|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%||$5,000 - $35,000|
|4.99% – 29.99%||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%2||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%||$2,000 - $25,000||Visit LendingPoint|
|5.99% – 35.89%||$1,000 - $40,000||Visit LendingClub|
|5.49% – 18.24%||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%||$2,000 - $35,000||Visit Avant|