Using Co-Signer for Personal Loan

[Anonymous]

Hi everyone!

This is my first post on here.  I am not sure exactly how in depth I need to be, but right now to give an example my credit score is at its height 475.  Extremely horrible, I know.  I am in my middle 20's, with limited history, and very clear room to recover from that score.

What I am asking is, my parents recently applied and were approved for a loan of about 11k.  This was for me to help pay for rent, etc.  I am in need of another loan, for about 10k.  This is in truth so I can restart my business as I got behind and using this amount would be massivly huge as the holidays approach.  Making no mistake I realize my poor credit history is an instant flag for any reviewal process, although I do make enough while my business is operating to pay this loan off in full within a months time easily.  For figure purposes my 1099k was $300,000+ last year.

If I had my parents, either mom or dad cosign the loan for me, with a credit score of 476, based off anyones experience in this (mine is limited) would I have more of a shot to at least be considered?  Last time I was automatically rejeceted, without even a hard inquiry on my credit report, and was unable to negotiate the loan price.  To my knowledge also 10k for a personal loan isn't exactly a lot, but its always about perspective I suppose.

For records sake my parents credit score is roughly 660-680.  They both have different scores, slightly.  I defiantly make more than them though on a yearly basis.

Any help would mean the world to me!

[Remedios]

Hi and welcome to the forums  @Anonymous 

I highly doubt your parents are going to be able to qualify for any PL loans at this time, nor do I think it's even fair to ask them 

You said "recently", so that must mean not much of that loan has been paid off.

Their own scores indicate either presence of negative info or high utilization. Your business "restart" is all but certain.  

With your scores, you do not have a shot, unfortunately. Adding another loan to the  existing one increases their DTI even further. 

Attempting to add another personal loan will be a huge red flag to any non-predatory lender. 

If they were to qualify (with less than savory lenders), they are looking at at least 24% APR, maybe more. The financial distress is pretty clear here. 

I think you need to go back to the drawing board and figure out a different way to do this. 

There is no way for you to tell how the business is going to work out, and it hasn't so far. 

If it does not, you cannot repay them for the original $10K loan, so adding another $10K to it just seems like a disaster to me. 

I think in your situation by far better option would be to see what can be done with your credit in terms of rebuilding, then proceed from there. 

I do believe you'd benefit greatly from visiting  rebuilding sub-forum. See what kind of ideas and assistance you can get there instead of getting your parents even deeper into a debt. Good parents will do just about anything for their children. It's up to us not to take advantage of that. 

Good luck and I really do hope you find a solution to your problem. 

 https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/bd-p/rebuildingcredit

[Anonymous]

IMO, it's a very bad idea for your Parents to take out a "Personal loan" to back "your Business" venture. Period. 

$300K last year doesn't guarantee the same next year, especially if you're having troubles now. 

[RSX]

Phrasing this carefully, I think the first loan being used to pay for rent is a bigger issue.  How much of that $300k was used by the business and how much made it into your pocket?   

I don't think you should ask for a co-sign from them.  They already have the one loan for you

just my opinion.  

[Anonymous]

Have to agree with RSX and Janus. Taking out another loan is a bad idea. Might buy you some more time, but isn't getting to the root cause of your problems.

Is this business your only source of income? Is it year round or seasonal? Can you work some side jobs to earn extra money? On one hand you are doing $300k sales, and say you could easily pay a $10k loan back in a month. But the fact that you need a $10k loan to keep the business going doesn't jive with that.

The main thing I'm saying is get to the root cause. Don't keep kicking the can down the road by taking out loans to stay afloat.