What To Know Before Co-signing An Auto Loan

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What to Know Before CosigningBecoming a co-signer for someone's auto loan will always be a risky bit of business, but if they have damaged credit then you can be sure the risks will skyrocket at an enormous rate. That being said if you trust someone and they need your help by all means feel free, but keep in mind that there are some things that you should be aware of before you make any kind of final decisions on the matter.

Make sure that you know there are a lot of bad things that can happen if you decide to co-sign on someone's damaged credit auto loan for a used car. That can happen in any co-signer situation so it is not just those with poor credit, but it is considered high risk for a reason so it is best to keep a cautious mind when someone asks you to become a co-signer for their auto loan.

Keep a Cautious Mind

Now when someone has high risk credit and is looking to receive an auto loan there are high chances that they are not going to get approved on their own. There are chances, but they will be much slimmer than most. In those cases that is when you the co-signer or also known as co-buyer comes in.

There are some things that you should know and stay very aware of before signing any contracts. The first one is that you are going to be responsible for payments if the primary borrower does not fulfill their duties by making their payments. You are also going to be required to sign the contract as well. Also know that you do have to have a good credit score otherwise you will not be eligible and your credit score is going to be pulled and reviewed as well as the person who is borrowing for the auto loan.

Extra Facts

If you are trying to become someone's co-signer or co-buyer then chances are that if you are related it will make it much easier. Typically if your income is not associated with theirs such as a father, mother, grandparent, sibling, etc. you will be considered a co-signer. If your incomes are intertwined because you are married then you are typically considered a co-buyer.

Now before you sign any type of contract you have to think very hard about if this is right for you. The second that the primary borrower does not make their payments you are going to be responsible for paying it. So if you have trust in them feel free, but if you have any doubt that they are going to be able to make their payments you may want to reconsider. It would be a great decision to send them this way because we can help those who have bad credit to get approved for auto loans (on their own) in situations that they never though were possible. There are no guarantees, but with one application in just a day you can possibly be pre approved for great financing at a dealership near you.

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Do you meet the basic qualifications?

  • At least 1 year with current employer
  • A minimum income of $1,500 per month
  • No repossesions within the last year
  • Any bankruptcies must be discharged
  • Money down may be required, but not in all cases
  • Must be a current resident of the U.S. or Canada