Apply for Personal Loans With a Co-Applicant for a Better Deal

personal loans with co applicant

Getting a deal on a personal loan usually requires good credit and a decent income. If you have less-than-perfect credit, personal loans with a co-applicant are an option to secure financing.

Adding a personal loan co-applicant to the mix will complicate things a little. There are additional considerations, discussions to have and paperwork to fill out. And not every personal loan provider allows cosigners.

However, applying for a personal loan with a co-applicant is definitely possible, and in some cases, preferable. It can improve your chances of approval and even help you secure a better personal loan rate.

Here’s how to weigh your personal loan co-applicant options and make the best choice for your finances.

Options for personal loans with co-applicant

When getting a personal loan, it’s possible you can apply jointly for the loan with another person as a co-borrower or a co-signer.

In both cases, both co-applicants’ credit histories are considered to approve the loan. Both applicants’ future credit scores will be affected by the new loan’s repayment history.

But “co-signer” and “co-borrower” have some key differences. Make sure you understand the details of your personal loan with co-applicants to be sure it’s leading to the arrangement you want.

What is a co-borrower?

When two people apply for a personal loan together, they are viewed as co-borrowers. This is usually the case in personal loans used for joint ventures.

For instance, an engaged couple might want to be co-borrowers on a personal loan for a wedding. Spouses might want personal loans with co-applicants to consolidate their separate debts together. Business partners might want to be viewed as co-borrowers on a loan used to launch their venture.

Obviously, there are situations when it makes sense to have a joint borrower. Each applicant is considered equally in approving the loan, including each co-borrower’s income and credit history. The co-borrowers are also equally entitled to the funds from the personal loan, and are equally responsible for repayment.

Because both borrowers’ incomes are considered, this arrangement can boost your chances of approval higher than just a cosigner. It is also more likely to result in lower interest rates.

What is a co-signer?

A co-signer is different from a co-borrower, and serves a different purpose. A co-signer will improve your chances of qualifying for a personal loan; if your credit score isn’t good enough to qualify, your co-signer’s credit score and history are also considered.

Your personal loan co-signer will apply with your for the loan. Usually, only a co-signer’s credit information is considered, not their income.

Additionally, a co-signer has no rights to the funds borrowed through the loan. Those still go to the primary loan applicant, who also has the responsibility to make loan payments. The lender will only pursue a cosigner for loan repayment if the borrower defaults on the personal loan.

How to get personal loans with co-applicant

Find a willing co-applicant

The first thing you’ll need if you’re hoping to get personal loans with a co-applicant? Find someone who’s willing to be the second signature on the loan.

If you’re applying for a personal loan with a joint borrower, you probably already have someone in mind. It’ll be the person who is sharing and equally benefitting from the loan, such as your significant other, spouse, or business partner.

If you’re looking for a co-signer, you can also start with a significant other. But it’s also common for parents or other family members to agree to co-sign a personal loan.

When discussing the personal loan with your co-applicant, make sure you cover the financial responsibilities. Talk about making payments and what you’ll do if you’re ever in danger of missing a payment. Consider how the loan will affect each applicant’s credit.

Everyone will need to understand the arrangement and set expectations to minimize the potential for harm to the relationship.

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Find personal loans that allow cosigners or co-borrowers

Once you have someone who’s agreed to be your co-applicant, you’ll need to find lenders who accept personal loans with co-applicants.

If you want to apply as co-borrowers, a credit union or traditional bank might be a good place to start. These institutions have wide range of personal loan products and options.

Citizens Bank, for instance, is a traditional bank that offers personal loans online. They allow co-applicants for their personal loans and set rates based on the higher FICO score.

For borrowers who want a simple personal loan with a co-signer, many brick-and-mortar banks and online lenders accept personal loans with co-signers.

Apply for a personal loan together

The last thing is to choose a lender and submit your personal loan application. You’ll need to submit your information and your co-applicant’s.

The lender’s application process will walk you through how to add a second applicant, as well as prompt you to provide relevant documents or verification. Citizens Bank, for example, has co-applicants each complete applications and submit them before processing them.

Not sure where to start? Here are the top banks for those looking for a personal loan.

Interested in a personal loan?

Here are the top personal loan lenders of 2018!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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