Can One Get a Loan Online with a Cosigner?

Christine Tan

Money lending is a high risk business. That is why online lenders put up high requirements to be met before one may qualify for a loan. Still, other online lenders are willing to take a risk with their clients. The answer to the question of, can one get a loan online with a cosigner is not simply a yes or no. Can we say it’s both? Read on.

There are many reasons why one would consider applying for a loan with a cosigner. One is to qualify for a more significant online loan amount. This happens in situations where the borrower has a below par credit score. As a result, their loan limit is lower. While most borrowers decline to disburse a loan to one with a cosigner, some still do.

Cosigner Requirements

A cosigner is a type of guarantor. He/she signs a promissory note and agrees to take responsibility in case the borrower is unable to pay the loan. Below are some of the requirements you must meet:

  • A minimum credit score of 670
  • Eligibility for the loan
  • Debt to Income ratio of at least 50%

How cosigner loans work

Online application

People no longer go to the bank physically to borrow money. Those days are gone. Nowadays, they make an application by filing an online application form. Once that is done, you should sit back and wait for the approval.

Select the loan amount

The application form needs to be as detailed as possible. For a loan with a cosigner, you need to select the loan amount. Online lenders offer varying loan amounts. Most likely, you will be given a minimum and maximum limits to choose from. Select the exact quantity you wish to apply for.

Avail details

First of all, you will be required to provide details of you and your cosigner, including contact information. Please do so promptly. On that note, you should have your cosigner close so that you may be able to provide accurate information. Ensure you are dealing with a genuine provider. This is because you may be providing critical information to the wrong people, and that is dangerous.

Wait for loan processing

In many instances, loan processing online is usually real-time. Therefore, expect the provider to respond promptly on whether you’re qualified for the loan. If yes, the online lenders such as Instant Loan will specify the exact amount you will be given, the repayment time and interest rate to repay your loan. In short, you will be provided with all the loan information you need.

Sign contract

Technology has increased efficiency, especially in the financial sector. Once you’ve been approved as qualified to receive a loan, an email will follow soon. Check it out, read the contract attached keenly and agree to terms and conditions by signing the agreement.


Just like any other loan provider, once you are qualified to receive a loan, the money will be disbursed to your account. Upon receiving the payment, it’s now time to spend wisely and start thinking about repayment.

In many instances, the loan recipient gives the cosigner a small amount of the loan as a thank you. Usually, this is optional, but some cosigners feel entitled. This makes it look like it’s their right. If you think the money is not enough for such, do not stress. It is not mandatory to give the cosigner a thank you token. After all, you will pay back the money to the last cent by yourself.

Benefits of having a cosigner

Quick approval

A cosigner can have your loan quickly approved irrespective of your eligibility. Imagine getting a loan approved instantly even though your credit score is terrible. This is a great plus.

Reduced interest rate

A cosigner’s credit score will stand in for you. It is a general rule that banks give increased interest rates to borrowers with bad credit scores. Since your cosigner has a good credit score, you will get a reduced interest rate. This means you will incur lesser costs in acquiring and repaying your loan.

Opportunity to rebuild your credit score

Once issued with a loan, this is an excellent opportunity for you to rebuild your credit score. Without a cosigner, probably the chance would not have presented itself. Therefore, take it and make use of it. Repay your loans on time and pay to the last cent. In the future, if you wish to borrow money online, it will be easy and possible.

Less pressure

With a cosigner, expect less pressure from your lender. Why? Because your lender knows in case you default, they have someone to go after. Therefore, they will sit back and wait for you knowing their loan will be repaid, whether by you or your guarantor.

Higher loan amount

The lender sets the amount loaned to you based on your cosigner. This means you are likely to get a higher loan amount. The loan provider will consider your cosigner’s credit score and not really yours. Since your guarantor has a higher credit score, the loan amount you will get will likely be higher.

Better terms and less conditions

Mind you, lenders increase requirements with respect to your credit score. With a higher score courtesy of your cosigner, expect better terms and lesser conditions. Had the lender considering your credit score, perhaps you’d had received more conditions and straining terms. Therefore, you should be thankful to your guarantor because of the better terms.

The Bottom Line

It is possible to get a loan online with a cosigner. While this is possible, the lender will have to do sufficient background checks to ensure the lending organization is not making the wrong decision. Going to borrow money online is turning out to be the better option for most people. It looks like banks are being left behind because of their lengthy processes and procedures. A cosigner loan does not guarantee anything. This means you may be denied a loan with a cosigner. Therefore, ensure the person you are choosing as a cosigner is of good character and credit record.

All the best.

About Retire Early Lifestyle

Billy and Akaisha Kaderli retired three decades ago at the age of 38 and began traveling the world. As recognized retirement experts and internationally published authors on topics of finance and world travel, they have been interviewed about retirement issues by The Wall Street Journal, Kiplinger's Personal Finance Magazine, The Motley Fool Rule Your Retirement newsletter, nationally syndicated radio talk shows and countless newspapers and TV shows nationally and worldwide. They wrote the popular books The Adventurer's Guide to Early Retirement (Your Simple Path to FIRE) and Your Retirement Dream IS Possible.
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