How to Apply for a Loan With a Co-Signer

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When your credit score is insufficient to qualify for a loan, one solution is to apply with a co-signer. A co-signer is an individual who accepts full legal liability for repaying the debt if you fail to. The lender then issues the loan on the basis of the co-signer's credit score. Lenders frequently require co-signers for private student loans because students rarely have enough credit history to qualify on their own. You can also apply for other types of loans, including auto loans and personal loans, with a co-signer.

  • Ask a trusted friend or family member to co-sign on your loan. This person should have a good credit history, stable income and be willing to repay your loan if you cannot.

  • Call the lender who you would like to apply with and ask if it accepts co-signers on loan applications. Not all lenders are willing to lend to borrowers who need co-signers. If your first choice lender will not take a loan with a co-signer, keep trying until you find one who will.

  • Ask your lender if you and the co-signer need to both fill out the initial application or if the co-signer applies later. If you are both needed, set up an appointment with a co-signer to fill out the application together.

  • Fill out your portion of the application at the lender's office or online. Common information required of both applicants include your name, address, annual income and your Social Security number to check your credit.

  • Have the co-signer fill out his portion of the application. He can do this at the same time as you, or the lender will give you instructions to have your co-signer apply later.

  • Wait for loan approval and sign the final loan documents with your co-signer.

Tips & Warnings

  • If someone asks you to co-sign on a loan, consider whether you believe that person will be responsible enough to follow through with making the payments on time every month. If the primary borrower fails to make payments for any reason, including death, you will be legally obligated to pay the debt.
  • A co-signed loan appears on both the primary borrower's credit report and the co-signer's credit report. The account, including the payment history and the outstanding debt, will be considered in future credit applications by either individual.

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