Some lenders require a cosigner before getting your loan application approved, especially if you don’t have a steady income and a good credit score. Having a cosigner can also increase your chances of getting better loan rates. However, for some people, it would not be easy to find a cosigner. Thus, they must think of other alternatives to help them out with their loan applications.

What is a Cosigner?

A cosigner is a person who is co-responsible for your loan. It means that if you fail to pay your loan, the cosigner shall be liable to make those payments on your behalf. Moreover, cosigners tend to be people you can count on like family or close friends with a strong financial background.

Having a cosigner is a great way to get your loan application approved, especially when you have bad credit. This is because cosigners act as a security for lenders, which means they don’t have to worry if you fail in making your loan repayments. On top of that, getting a cosigner can help develop a credit boost for you and the cosigner if you make on-time repayments.

Co-signing Alternatives

If a lender thinks it would be difficult for you to get a loan without a cosigner, don’t lose hope. There are other ways to strengthen your loan application.

Below are some of the alternatives you might want to consider:

Improve your Financial Background

Your financial status is the primary aspect lenders look into in your loan application. The better the financial background, the higher the chances of getting approved. If you are having some trouble with your finances, here are ways to improve it:

  1. Build Your Credit: One of the best ways to eliminate bad credit is to improve it. You can do this by getting small loans, making repayments on-time, and repeat. This process usually takes time. But, this will surely improve your credit scores and significantly affect your future loan applications in a positive way.
  2. Increase Your Income: Lenders calculate the risk of getting your loan approved by using the debt-to-income ratio. A ratio under 36% is the result many lenders look for. This will help them determine if you are capable of paying your debt in connection to your income. In case you have a low income, it is wise to increase it by getting a part-time job or having some investments.
  3. Pay Existing Debts: If you still have debts you need to pay, it is best to pay them first before moving into another. Your existing debts will significantly affect your income and credit score. On top of that, if you pay those debts off before getting another loan, it would be easier for you because you will have lesser monthly obligations to worry for.
  4. Correct Credit Errors: There are times where your credit reports can get mistaken. This will significantly influence your loan applications. In order to solve this, you should contact the credit bureau that made the mistaken report immediately to fix such errors.

Borrow Less

Lenders might deny your intended loan application because they think it would be difficult for you to repay considering your financial background. A solution to this would be to borrow less. With that said, the amount you intend to borrow should be in connection to your capacity to pay. This creates less risk to lenders and will be easier for your part because you will be capable of paying the debt.

Put Up Collateral

You can use any of your valuable assets as collateral in getting your loan approved. Collateral acts as security for lenders. However, putting up collateral can be risky. If you fail to make repayments, the lender will run for your collateral. For example, if you made your car a collateral for a loan, the lender can repossess it if you fail in paying your debt. If you plan on pledging collateral, you should be ready for the possibility of losing it.

Look for Other Lenders

If one lender denies your loan application, it does not mean it’s the end of the road for you. There are many lenders out there; some even offer loans to people who have bad credit. You can check on credit unions, regional banks, and online lenders, for example. Moreover, some lenders look beyond your credit and income status, such as the degree/s you have earned. This is a good option for those who have no credit or bad credit.


Many people might find it challenging to get a cosigner for some reason. And although having a cosigner can increase your chances of getting a loan, there are still other options to consider. Furthermore, you can work on these ways to strengthen your loan applications and increase your chances of getting a loan.