With
the rising delinquencies, one thing is sure, the lenders have become
skeptic about lending money to people with credit issues. Now, they are
more cautious regarding their investments and need an assurance before
lending money to anyone.
Does
it mean that a person with low FICO score or zero credit history won't
get an auto loan? Of course not. The credit borrower only needs a
helping hand in the form of a cosigner to support his loan application.
So, let’s get enlightened about a cosigner and how he will affect your
loan application.
Who is a Cosigner?
A
cosigner is a person who signs the loan documents along with the credit
borrower. He is obligated to pay for the auto loan if the credit
borrower fails to repay the borrowed amount.
The
lenders see a cosigner as a guarantee for regular loan payments. That's
why; having a cosigner by your side will support your loan application
positively.
When do you need a Cosigner?
When
a credit borrower has credit issues such as a bad credit history, a
zero credit score, repossession in the past, etc., the lender will be
reluctant in approving his loan request. He will require a cosigner to
provide guarantee of regular monthly payments.
If
you fail to make timely payments or decide to avoid them, the cosigner
will have to shoulder the responsibility of the loan amount and he will
have to pay it to the lender.
What are the Eligibility Criteria for a Cosigner?
A
person with a very good credit history and a high FICO score is
considered as a strong contender for becoming a cosigner. A friend, a
family member, a neighbor, etc. is eligible to become cosigner for your
auto loan.
Remember
that the cosigner must be enlightened regarding the loan terms and
payment schedules. And most importantly, he should support your loan
application willingly.
What are the Advantages of having a Cosigner?
- Your loan application will get approved easily as the lender will enjoy the necessary trust and with the help of the cosigner.
- Despite your credit issues, the lender will provide you with low interest rates because of the cosigner.
- Making timely payments will boost your credit score and put an end to your credit issues.
- The lender will not scrutinize your financial details and raise unnecessary queries.
- Getting auto loan approval becomes easy.
A
cosigner is a helping hand that will ensure quick and definite auto
loan approval. So, find someone who can become your cosigner and apply
for an auto loan without any tension.
Having
a cosigner has its perks. But, do not worry if you cannot manage to
find someone with a good credit score. CarDestination, the ultimate bad credit auto financing company, has you covered. Apply for no cosigner car loans and get loan approval quickly.
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