How to Get a Loan Without a Co-signer
Most times, getting approved for a loan is easier and faster when you have a co-signer. But this is not always possible for multiple reasons. Maybe you cannot find a person willing to co-sign with you or perhaps you want to take full responsibility over your loan. Whatever it is, know that there are ways to convince lenders to give you funding while leaving everyone else out of it.
Co-signing in brief
The most important point for lenders is your ability to repay your loan. They review this based on your credit score and available income for loan payments. If after evaluation, they are not convinced of your capabilities, a co-signer may be recommended to strengthen your application.
This is all well and good for you, but it carries a big risk for the co-signer. Legally, they are liable for the loan in every way that you are, too. By signing that loan, they agree for the lender to collect from them in case you fail to make your payments.
So it is understandable if people are unwilling to go through this process with you. But do not worry because there are still ways to get a loan approved without a co-signer.
5 Best Tips to Get a Loan Approved
If at first your application gets rejected, look for ways to improve your own finances first, instead of immediately turning to a co-signer. Below are some of the best ways:
- Improve the shape of your credit. Rebuilding is always a challenge but it is not impossible. Establish healthier financial habits and be patient.
- Look for errors in your credit report and fix them. Correcting these mistakes can instantly improve your credit score by a mile.
- Add more streams of income. If you can show the bank that you have more income to go to your monthly payments, then they are more likely to approve you. Obviously, the higher the income, the easier to pacify the lenders.
- Consider borrowing less from the amount you originally applied for without a co-signer to your application. A bigger down payment can also improve your loan to value ratio and make the loan more attractive to lenders.
- Manage existing debts. These weigh you down and make getting new loans much difficult. Get rid of existing debts and lower your monthly obligations. Also, this does wonders for your credit score, which eventually leads to improving your chances of getting approved for a loan on your own next time.