Yes, there are ways to get a cosigner for vehicle financing online, but it could cost you a pretty penny. Borrowers typically look for a cosigner online because they have poor credit. There are other resources available for bad credit borrowers who need vehicle financing too.
How Does a Cosigner Help?
A cosigner’s main purpose is to “lend” you their good credit score and promise to pay for the car loan if you’re unable to. With two people on the loan responsible for the balance, using the cosigner acting as the back-up payer if you’re unable to pay, there’s less of a chance for default so it increases your chances of getting approved for financing despite a lower credit score.
A lender may not necessarily care too much about who your cosigner is since their biggest concern is making sure they have good credit and enough income to cover your payments if you head down the path of default.
How Do Cosigner-Finding Websites Work?
There are few sites out there that can get you a cosigner by connecting you with strangers that have good credit, but it’s not free. A few of these sites require an application fee and if you’re accepted, then you choose a cosigner and pay them for their help.
Cosigner-finder sites that connect you to cosigners function a little bit like dating sites, in that you complete an application and they help you find a cosigner that fits your situation. They can work because cosigners don’t need to live in your home state to help you get approved for an auto loan. You don’t have to be related to your cosigner – they just need to meet lender requirements.
Websites that offer cosigner-matching services typically require your credit card information, location, email address, and ask you to explain why you need a cosigner. Expect to pay both the cosigner for putting their good credit on the line and for using the matching service.
Keep in mind that adding a cosigner to your auto loan application doesn't mean a guaranteed approval. If you hire a cosigner, it doesn’t mean you have a 100% chance of getting the car loan – just a higher chance.
Shopping for a Cosigner
The overall cost of hiring a cosigner can depend on the size of the auto loan you want and your credit score. If your credit score has serious derogatory marks, it’s probably going to cost you more to hire a cosigner. Some online cosigner-finder sites charge more depending on how fast you need one, and some function like large forums where you talk to potential cosigners and pick the one that's right for you. Other sites have listings of cosigners that fall into specific credit ratings which you can choose from.
As for nailing down a price-point for the actual cost of hiring a cosigner, it’s not that easy to figure out. Some sites allow you to barter with the cosigner, some require you to cosign for their loan in exchange for them cosigning yours (cosigner for cosigner). You may even have the ability to offer payment forms outside of cash, but it all depends on what a cosigner wants out of the deal.
An apartment cosigner website states that your rent payment determines your cosigner fee. This means if you're looking for a place that costs around $3,000 a month, the fee for using their service for a cosigner is around $3,000, too. In other words, the price of the cosigner-finding fee is one month's rent. For a car loan, the size of the loan could impact the cosigner fee drastically.
You may also have to enter into several separate contracts, with varying conditions, with a cosigner to seal the deal depending on what you need. For example, a cosigner may not agree to cover your car payments if you’re unable to – they may just agree to help you get approved for the loan. So, while using a cosigner you find online can be good in a pinch, you never quite know what you're going to find.
Risks for You and the Cosigner
Not everyone on the internet is well-meaning. So if you decide to shell out your hard-earned cash and sensitive personal information, be selective about it. Entering a legal contract with a total stranger is risky. Be sure to read the reviews of the cosigner-finder companies as well, including their Better Business Bureau (BBB) rating.
Most bad credit borrowers ask people that are close to them when they need a cosigner for an auto loan. Cosigning a loan is a big responsibility, and many first-time car buyers ask a parent or a close family member for help in qualifying. Ask someone that you can trust, and make sure that they can trust you as well.
A cosigner that helps you get approved for a car loan is risking their good credit for you. While cosigners don’t get any rights to the vehicle, any reporting on your credit reports is reflected on theirs as well – good or bad.
Because they're taking on a big risk, it’s not cheap to hire a cosigner. Instead of paying for a stranger's help with no guarantee that you’ll get approved for the loan, consider special financing instead. These lenders, called subprime lenders, specialize in helping bad credit borrowers.
Vehicle Special Financing
Having bad credit doesn’t always mean you have to hire a cosigner to get into an auto loan. Subprime lenders willing to assist borrowers with poor credit are signed up with special finance dealerships.
They can tell the difference between no credit, situational and habitual bad credit, and often work with bankruptcy borrowers as well. This is because they look at the bigger picture – meaning they dive into your overall credit history and financial stability.
Subprime lenders require a down payment, proof of income, ask about your work history, require a list of personal references, and proof of a permanent address. Because they ask for more information about you, they’re able to look outside of your credit history to determine your creditworthiness. With a subprime auto loan, there’s a good chance you won't need a cosigner.
Ready for an Auto Loan?
Finding a cosigner online can be tough, and it can cost you. If you’re struggling with poor credit, there may be a better way to get into an auto loan right here at Auto Credit Express.
We’ve been connecting borrowers to dealerships that have bad credit lending resources for over 20 years, and we want to help you too. Start right now by filling out our free auto loan request form, and we’ll look for a dealer in your local area. There’s no catch, our form is secure, and there’s never an obligation to buy from the dealership we match you with. Get started today!