Even if you have shaky credit history or little to no credit history at all, you may still be able to get a personal loan if you bring a cosigner on board with you. With this type of loan, the cosigner agrees to take responsibility for the loan if you default on repaying it.
Get a Personal Loan With a Cosigner
Things You'll Need
- Proof of income
- Cosigner with good credit
Ask a parent, close family member or close personal friend with a good credit rating, established credit history and solid financial standing to be your cosigner.
Find out if your bank or your cosigner's bank offers these types of loans. Many financial institutions offer only limited loan options to people who need to enlist the help of a cosigner. If this is the case, find out what options are available to you and evaluate them with the input of your cosigner.
Try to find a loan option that won't require your cosigner to put up collateral. While this may not always be possible, the idea of using a cosigner is to secure a loan based on that party's superior credit history. Individuals with superior credit history should qualify for unsecured loans (that is, loans that don't require up-front collateral to be deposited).
Bring your cosigner with you when you visit the lending institution to fill out the loan application. You might be able to use your cosigner's good financial standing as a bargaining tool to get a lower interest rate or better repayment terms.
Present proof of your current employment situation and income viability to the lending bank. Even though you're having the loan approved based on your cosigner's credit, you're still the one expected to repay it. The lender will want to see proof of your ability to do this.
Borrow only as much as you need. Don't give in to the temptation to use your cosigner's financial standing to get a bigger loan. Remember, larger loans mean more interest.
Try to avoid using online lenders if at all possible. They exist to take advantage of people who have problems getting loans from regular banks. With a cosigner's help, you should have very little trouble securing a loan.
Get the personal loan deposited into your possession, not your cosigner's, once your application has been approved.