How to Get People to Cosign a Loan for You

A potential loan cosigner wants to know that you’ll be responsible in paying back the money being borrowed through their personal guarantee. Failure to make such assurances or follow through on your commitment can create financial hardship for both you and your cosigner.

A cosigner is an individual over 21 with an established financial history and a proven money management track record that typically includes a steady income and an above-average credit score. This individual agrees to take on the legal responsibility of a loan’s repayment in the event you default. If this happens, the cosigner is forced to make your loan payments or risk damaging her own credit score.

Asking someone to financially vouch for you is a big favor. Close relatives usually are approached for this role because they presumably know you, trust you and want to see you succeed in managing your finances. If you’ve made financial missteps or bad decisions in the past, or if you don’t have steady employment or good money managing skills, they may hesitate. Reassure them of your abilities in the following ways:

1. Make a budget that reflects your income, your debt and existing financial obligations. Show the cosigner your calculations and explain how you intend to cover your loan payment in addition to your current bills.
2. Build up your savings. Being able to demonstrate you have money in reserve may convince a potential cosigner that you’re a good credit risk.
3. Draw up a written statement in which you outline your contingency plans for paying your loan, even if your financial circumstances change. For example, describe what you will do if you lose your job, have unexpected bills or otherwise need to radically adjust your budget.
4. Explain how you’ve dealt with financial obstacles in the past, especially if you need a cosigner because your credit is bad. For example, describe how you got behind on your bills and what you’d to make sure that doesn’t happen again.