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How to get a loan without a cosigner


Person sitting at desk reviewing loan documents while smiling

A cosigner is a person who adds their name to your loan application. By doing this, they agree to share the responsibility for making payments.

If your credit score is low, or you have a limited credit history, having a cosigner with a high credit score can strengthen your loan application. You may also be able to get a lower interest rate if your cosigner’s credit is good.

But what if you don’t have a cosigner, or don’t want to use one? Can you still qualify for a loan? In this article we’ll look at some other ways to increase your chances of being approved for a loan.

Here’s what we’re going to cover:

  • When do you need a cosigner for a loan?
  • Getting a loan without a cosigner
  • Strategies for improving your credit
  • Oportun: Affordable lending options designed with you in mind
Key takeaways:

  • It can be difficult to get approved for a loan if you have a small income, a low credit score, or a limited credit history. Adding a cosigner with a high credit score is one way of improving your chances of getting approved.
  • You may still be able to get a loan without a cosigner. You might try applying for a secured loan, or a loan in a smaller amount. You could also apply to credit unions or online lenders rather than traditional banks.
  • Improving your creditworthiness can also increase your chances of qualifying for a loan. You can do this by raising your credit score and reducing your debt-to-income (DTI) ratio.

When do you need a cosigner for a loan?

Lenders want to make sure they will be paid back on time, so they usually set minimum standards for income and credit score. Some lenders list this information on their websites so you can easily check whether you meet their basic loan requirements. If your income is too small or your credit score too low, it can make it difficult to get approved for a loan.

Applying with a cosigner is one way to strengthen your loan application. Your cosigner should be a person you trust, such as a family member or close friend, who has a high credit score. When they cosign your application, they are agreeing to make the loan payments if you do not.

The lender will consider the cosigner’s qualifications as well as yours. This could increase your chances of being approved for a loan. It may also allow you to get a larger loan amount or a lower interest rate.

Getting a loan without a cosigner

If you have a high credit score and earn a steady income, you may not need a cosigner. Your credit history will already show that you make payments on time and manage your debts well.

But if you don’t have a good credit score, or your credit history is limited, you may need to try other strategies. Here are some alternatives to applying with a cosigner.

Apply for a secured loan

A secured loan is one that requires collateral—something of value that you agree to give your lender if you don’t make your loan payments. Examples of collateral include your car, your home, and other valuable possessions.

If you don’t repay your loan, the lender can take your collateral and sell it to pay off all or part of your debt. Because no one wants to lose their car or other valuable property, offering collateral reassures lenders that you will make your loan payments on time.

Apply to a nontraditional lender

A traditional bank may not always be your best choice for a personal loan. Credit unions and online lenders sometimes have more relaxed standards for borrowing money. Applying to one of them may give you a better chance of being approved for a loan. Look for lenders that consider factors besides your credit history. You may qualify for a loan with one of these lenders even if you have no credit history at all.

Apply for a smaller loan

The amount of money you request also affects your ability to get a loan. Larger loans can be harder to qualify for than smaller ones, because the lender could lose more money if you don’t make your payments on time.

Asking for a smaller loan could make it easier to get approved.

Strategies for improving your credit

If you’re still being turned down for a loan, you may want to work on improving your finances for a few months before you try again. Here are some steps you can take to increase your creditworthiness.

What does creditworthy mean?
A creditworthy borrower is someone who can be trusted to make payments on time every month.

Practice good credit management

If your credit score is low, you can start to raise it by paying all your bills on time every month. Be sure to keep your credit card balances low, and don’t apply for more credit unless you really need it. All these factors affect your credit score.

Build your credit history

If you don’t have any credit history yet, you may want to apply for a credit-builder loan or a secured credit card. These helpful financial tools give you a chance to prove your creditworthiness.

Both a credit-builder loan and a secured credit card require you to make a deposit for the same amount as the loan or credit limit. There is no risk to the lender, because when you use the loan or credit card you are borrowing your own money. The advantage for you is that your regular, on-time payments establish a positive credit history.

Increase your income

Lenders often consider your debt-to-income ratio (DTI) when reviewing your loan application. This ratio compares the amount of money you earn to the amount of debt you currently have. Most lenders prefer applicants with a DTI of 43 percent or less.

Earning more money can help bring down your DTI. You may be able to increase your income by asking for a raise at work or by taking a second job. Your higher income is one way to show lenders that you can afford to make monthly payments on a new loan.

Pay down your debts

The other factor in your DTI is your monthly debt. If you already owe a lot of money on credit cards and loans, lenders may believe that you won’t be able to afford more debt payments. By paying down your balances, you can reduce your DTI and free up more income.

With a stronger credit history and lower DTI, you have a better chance of being approved for a loan without a cosigner.

Oportun: Affordable lending options designed with you in mind

Now that you understand how to get a loan without a cosigner, you can learn about how Oportun may be able to help you if you’re looking for affordable credit options.  Visit our homepage to learn about:

  • Personal loans
  • Credit cards
  • Secured personal loans
  • And more!

Experian. What is a cosigner?
FICO. What’s in my FICO® scores?
Investopedia. Debt-to-income (DTI) ratio


The information in this site, including any third-party content and opinions, is for educational purposes only and should not be relied upon as legal, tax, or financial advice or to indicate the availability or suitability of any Oportun product or service to your unique circumstances. Contact your independent financial advisor for advice on your personal situation.

Personal loans through Oportun subject to credit approval. Terms may vary by applicant and state and are subject to change. If you refinance, you may pay interest over a longer period of time or at a higher rate and the overall cost of your loan may be higher. Loans in CA, ID, MO, NM and WI are originated by Oportun, Inc. California loans made pursuant to a California Financing Law license. NV loans originated by Oportun, LLC. In AL, AK, AR, AZ, DE, FL, GA, HI, IL, IN, KS, KY, LA, MI, MN, MS, MT, NC, ND, NE, NH, NJ, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA and WY loans are originated by Pathward®, N.A.. Terms, conditions, and state restrictions apply.

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