Should I Get A Personal Loan With A Co-Signer?

By Sa El

Credit expert, licensed Insurance agent, Real Estate agent, and Co-Founder of Credit Knocks

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Summary: This post helps you understand if and when you should get a co-signer for a personal loan.

If you need a large sum of cash to take care of a certain expense, getting a personal loan may be your only option, but do you need a co-signer?

Well, the truth is: 

Having a co-signer is great, but you need to learn exactly when you might need one and the pros and cons of using one. 

In this post today I will go over if you should get a personal loan with a co-signer, what a co-signer is and how to get a personal loan either way.

What Is A Co-Signer?

In plain English, a cosigner is just another person that signs on the loan with you. 

Both of you will be financially responsible for paying back the loan, and if it isn't paid, both of your credit scores will be affected. 

The reason why you might need a cosigner is that the lender might not have enough confidence in your specific credit score.

Adding a cosigner with a better credit score could assure the lender that the loan amount would be paid back, and you might even qualify for a lower rate.

However, keep in mind that you should never go into debt trying to keep up with the Joneses so if you don't have a real need, you shouldn't get the loan.

getting a personal loan with co-signer

Who Makes A Good Co-Signer?

You can have a friend, relative, or spouse be your cosigner when it comes to a personal loan.  

Below are some qualities you should look for in your cosigner: 

Someone Who Can Afford The Payments

You want to choose someone that can afford the monthly payments if (at some point) you are unable to afford them. 

A Person With A Great Credit Score

You want to be sure to go with someone that has good or excellent credit. If you aren't sure what a good credit score is, we created an entire post titled What Is A Good Credit Score

Quick Note:

Your co-signer's credit is at just as much risk as your credit if they co-sign on your loan.

They Don't Mind A Hard Inquiry

Someone who doesn't mind getting a hard inquiry on their credit report. Remember, when you apply for the credit, you will probably see a hard inquiry.

An Increase In Debt Is "OK" With Them

A person who doesn't mind adding to their overall debt. They are going to be equally responsible for the loan and should consider the debt theirs.

Considerations Before Getting A Co-Signer

There are some limitations both you and your cosigner may face so it is essential to understand what they could be before you ask someone to be your cosigner: 

The Risk Is Huge

It might not seem like it, but the risk is enormous for both yourself and a cosigner. 

Remember, both of you are responsible for payments, so if a payment is late, it will affect both of your credit scores.

This makes it super important for you to be able to afford your payments without your cosigner's help.

Payment history accounts for over 30% of your total credit score, which means that getting just one 30 day late can ruin your credit for the immediate future.

However, making on-time payments can help increase your score. 

Every lender Doesn't Accept Cosigners

There are a few banks that will accept cosigners, but not all banks allow this process, so be sure to ask directly before you try to apply with a cosigner.

You Might Have To Refinance To Remove The Cosigner

Getting your cosigner removed might not be possible regardless of how good you are doing at paying the loan back.

Because of this, your only option might be actually to refinance the loan based on your own credit. 

If your credit has become better and you qualify for the refinance, this would release the cosigner from their responsibility and also give you lower payments.

Quick Tip:

Always consider building your credit before you think about getting a co-signer.

The Pros & Cons Of Getting A Co-Signer 


  • Ability to get a loan when you originally couldn't qualify
  • Get lower rates on your loan
  • The Loan Can help build your credit
  • Someone Else Would Be Obligated To Help


  • Your cosigner is on the hook if you don't make your payments
  • You are risking your personal relationship
  • If you miss a payment on the loan, it will affect your co-signers credit.

Alternatives To A Loan With A Co-Signer

If you are unable to find someone that will be a cosigner for you, you still have a few options which include: 

Wait Until Your Credit Score Is Better

The best thing to do is to wait for your credit score to become better. There is no better option than this because it allows you to obtain the loan without needing a cosigner. 

You can see what rates you may qualify now for by going to our best personal loan rates by credit score article

In all honesty, this should be your first choice when you decide to use your credit unless it is some type of emergency. 

Borrow A Smaller Amount Of Money

If you decide to obtain a smaller loan amount, you could qualify for the loan based on your debt to income ratio.

You also might qualify based on the credit score that could be required based on how much you borrow.

Try To Make Money Online

If you can't get approved for a loan, and no one will co-sign for you, it doesn't mean your need for the loan will go away. 

There are tons of ways to make money online that you can look into that could help replace the need for a loan altogether. 

Now, making money online isn't easy, but it can help you immediately depending on the route you choose. 

Apply For A Secured Loan

If you have collateral to offer, such as a home or vehicle, you might be able to qualify for a secured loan with a lower credit score. 

The way a secured loan works is that you will put an item up as "Security" for your loan if you were to default on it. 

In essence, you are saying, if I don't pay this loan off, you can pull the amount I owe from the item I am securing the loan with.

Taking Action

If you need a personal loan, obtaining one with a co-signer may be your best option. 

However, if you don't need a co-signer, then I say avoid them at all costs, there is nothing better than obtaining a loan on your own merit when you can.

You can check out our list of best personal loans if you are ready to get a few rates and get your loan started.

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