Perhaps you’ve never heard of a cosigner. Or maybe you have, but it was for your first apartment, or you assumed it was only for really big loans, like a car loan or mortgage. You’ve probably never thought about using a cosigner for a small personal loan. Well, that’s what Transform Credit was created to offer.
If you’re looking for a personal loan, typically, you would apply for this on your own. As part of the application process, the lender would pull your credit report and credit score. If your credit score is too low, or if you have missed payments or collection accounts, the lender may decline your application.
A cosigner loan works differently. Instead of looking at the applicant’s credit history, a cosigner loan like Transform Credit looks at whether or not the applicant has someone who trusts them enough to cosign the loan. The cosigner is responsible for stepping in and making payments if the borrower isn’t able to. The cosigner will undergo the credit check instead of the borrower. If the cosigner meets the borrowing criteria, the applicant will be able to proceed and borrow the money.
Cosigner loans work mostly similarly to traditional loans, but with both an applicant and a cosigner completing an application and contract. At Transform Credit, first the prospective borrower completes a loan application and signs an agreement. Then, they will need to nominate a cosigner by supplying their information and contact details. We’ll then send the nominated cosigner their application to complete. If approved, we’ll disburse the loan proceeds into the cosigner’s verified bank account. This helps protect against fraud, by ensuring the named cosigner is aware of the loan and their obligations. The cosigner then transfers the funds to the borrower.
Yes! That’s the whole point of a cosigner loan. We do not consider the borrower’s credit history or credit score for a cosigner loan. So as long as you're aged 18 or older, live in a state in which we operate, and are not in active bankruptcy, we should be able to accept your application. We will need to verify your identity as part of the application, which is why we do ask for the borrower’s social security number and date of birth.
No! As explained above, that’s the whole point of a cosigner loan. We don’t conduct a traditional credit check on the borrower. As long as we’re able to verify your identity and that you are not in active bankruptcy, you will most likely be approved! You do need to find a qualified cosigner, who will need to pass a traditional credit check.
A cosigner is a friend or family member who trusts you enough to cosign your loan. They should be financially stable, pay their bills on time, and have a strong credit history and credit score. For example, someone who owns their own home typically makes a strong cosigner. A prospective cosigner should be financially independent of you, meaning that you don’t share financial accounts or obligations, like a bank account or credit card.