How to Get a Personal Loan With a Co-Signer

Your spouse can co-sign a loan application if her credit score is high enough.
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If you have poor credit, you may need a co-signer with a higher credit score to add her name to your loan. This family member or trusted friend can be just what you need to be approved for a personal loan to pay off debt or fund a wedding or dream vacation. However, a co-signer takes a very big chance when she agrees to co-sign your note.

Consider the Relationship

While getting a loan is a financial decision, co-signing a loan is also a personal decision. If something goes wrong while you're both on the loan, your relationship could suffer. Your co-signer likely expects you to make the payments as agreed. If you don't, your co-signer will have to pay the bills, or her own credit score will drop. Failing to pay a co-signed loan has the potential to rupture your relationship, so make sure it's within your ability to pay off your loan.

Find a Co-Signer

A co-signer can be anyone you trust, such as a parent, grandparent, sibling or spouse. When asking that individual to co-sign, come prepared to justify both the purpose of the loan and your ability to repay it. Agree on what will happen if you find yourself unable to make the payments. For example, if you need a co-signer for personal loan to pay off your credit card debt you could agree that if you find yourself unable to pay the note, you'll sell your car or other assets to avoid leaving your co-signer in the lurch.

Application Process

Your potential creditor will check your credit report and your co-signer's credit report. In addition to a high credit score, the lender will be looking for proof of a reliable income from your co-signer. You'll both need to sign the agreement to repay the loan, leaving both of you liable for the debt.

On Your Own

After you've made several monthly payments on time, you may decide you want to release your co-signer from her obligation. Some loans allow you to do this automatically after making a specified number of payments on time. For most, however, you'll have to refinance the loan to remove the co-signer. You'll take out a new loan in your name only, at which point your co-signer's obligation ceases.