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Last updated on May 17th, 2023 at 12:03 pm

No, you typically do not need a cosigner in order to get a payday loan. This is also the case when you apply for a payday loan online with Pheabs. Payday loans are almost always unsecured. Your eligibility is instead based on other factors, such as employment status and credit score. Payday loan amounts also tend to be smaller than other loan types, sometimes only a few hundred dollars, and are often repaid in a matter of weeks. So using a cosigner for such a small and fast loan is rarely warranted.

Loans that require a cosigner are often used for much larger amounts, and are therefore often associated with auto loans, business loans, or even mortgages. Similarly, they may be used for loans with individuals who have poor credit, as a way to make their loan application more credible and boost their chances of approval. However, the cosigner market in the US is still relatively small (and growing), as opposed to countries such as the UK where cosigner loans are a much larger market.



cosigner loan pheabs

What Is A Cosigner and Why Would I Need One?

A cosigner is an individual who agrees to repay your loan if you are unable to. They are often parents, close relatives, or friends. If you fail to meet your loan repayments, a lender can ask your cosigner to pay instead. The cosigner acts as a second port of call if you should default on your loan.

Because of this, to be a cosigner for someone, you must trust them and be willing and able to cover the repayments if that becomes necessary. A cosigner must also be over 21 years old, financially stable, and have a good credit history. If your loan lender requires a cosigner, it likely means that your financial circumstances have caused the lender to require extra security. For example, a young person with no credit history may require a cosigner for their first-ever credit.

Why Do People Prefer No Cosigner Loans?

For some people who are looking to take out a payday loan, a no cosigner loan is often preferable since they tend to be processed much faster. If you do not have a friend or relative who will immediately agree, it may be a concern that the necessity of finding a cosigner will slow down the process too much. 

Another reason why people tend to prefer no cosigner loans is privacy. For those who do not wish to discuss their financial predicament with others close to them, finding a cosigner will pose a problem. 

Do I Need A Cosigner To Get A Payday Loan?


Will I Be Charged Higher Interest For My Payday Loan Without A Cosigner?

You may be charged higher interest without a cosigner. Because a cosigner adds an extra element of security for the lender, the risk that the lender is taking in providing the loan is reduced, and this will therefore also reduce the interest rate. However many other factors usually decide interest rates. 

This is especially true with payday loans because they tend to be unsecured loans. The interest rate for a payday loan is primarily influenced by several other factors, including your financial circumstances, credit history, and loan requirements.

When searching for a loan with bad credit, some companies will insist on using a cosigner for extra security. But what are your options if you do not have access to a cosigner, and have a bad credit score? 

At Pheabs, we work with lenders across the US  who deal with borrowers of all types, with a wide range of credit histories. Therefore we have options for you even if you have poor credit and can’t or don’t want to use a cosigner. Fill in our quick, easy application form today to find a loan to suit your financial needs. Obtaining a payday loan is an incredibly common practice. In fact, a recent report states that around 12 million Americans use payday loans to get access to quick cash.

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