Getting approved for an auto loan is tough when you have damaged credit or no credit. For some lenders, your assurances to pay back the loan or even showing you have the financial means to easily make the monthly payments aren’t enough.
The lender needs to be able to see that you are capable of making on time payments. They do this by looking at your credit report. If you have a history that shows late and missed payments, or simply no history, they see it as the same. They will need reassurance. When you have bad credit or no credit, they will want you to have a cosigner.
What a Cosigner Needs
A cosigner is someone who will agree to take on the payments for the loan in the event you default on it. It can be a family member, spouse or, in most cases, a close friend. For a lender to accept a cosigner to your loan, they will need to meet a few requirements:
- Have the income to show that they could maintain the payments if needed.
The cosigner will need to show that they can support the monthly payments in the event you can’t make them.
- Have a good credit score.
In order to get approved for a good rate, and as further reassurance to the lender, they will want the cosigner to have a great credit history that shows reliability.
- Have stable employment and residence.
This is another thing a lender will want to see to assure the cosigner can be counted on.
If you think a cosigner will be your best option to get a better rate, go for it. However, remember that the person that is cosigning for you is taking on a huge responsibility as well as doing you a huge favor in helping you get the loan for the car you need. Keep up with your payments so they don’t need to take on your burden. If you are going to ever have difficulty making your payments, communicate this to your cosigner and work out a plan.
Sign with the Best
Suburban Auto Finance can help you get the auto loan you need. Our staff is experienced and ready to help you get approved, and will always do everything possible to ensure you can get approved for the best deal you can qualify for. All you need to do is fill out the online application.
From there, we will contact you to arrange a meeting time to go over the paperwork and then help you select the car, truck, van or SUV you need.