When you’re struggling to get an auto loan due to bad credit, there are special lenders available, called subprime lenders, that can help you get a car loan. However, if you don’t meet the qualifications of these lenders, what are you supposed to do? A co-borrower could help.

How a Co-Borrower Helps

How Can a Co-Borrower Help You Get a Bad Credit Car Loan?Because these lenders look at factors in addition to your credit score to qualify applicants, you need to meet a number of requirements. These include a minimum income level and rules about your employment.

Subprime lenders typically require a minimum income of around $1,500 to $2,000 a month before taxes from a single job. If your income is too low, non-taxable, or comes from multiple sources, you could have a problem qualifying for a car loan.

If you can't meet these requirements on your own, a co-borrower is someone that can help you qualify. If you add a co-borrower that is a spouse to your auto loan, you can combine incomes to meet the requirements together. This could give you the advantage you need to get approved.

Because you combine incomes, co-borrowers don’t have to meet the lender qualifications on their own, but you should still look for a co-borrower with better credit as well as a qualifying income. By adding someone with better credit, you may qualify for improved rates and terms on the loan.

Co-Borrower Responsibilities

Before you run off to ask your significant other to be a co-borrower on your loan, you need to know that there are a few responsibilities that are involved for your co-borrower.

Because the loan is based on both of your incomes and credit scores, you’re going to be in this together. This means you’re both responsible for making sure the loan is paid on time each month; if you can’t make your loan payment, the co-borrower has to.

It also means that both of your credit scores are affected by the loan – for better or for worse. A co-borrower shares ownership of the vehicle with you, so it’s important that you talk about this beforehand and that you each know your rights and responsibilities before signing any documents together.

Don’t Confuse Co-Borrowers with Cosigners

A co-borrower can help you qualify for a loan when your income doesn’t meet lender qualifications, but there’s another form of help: a cosigner. People sometimes think these two are the same thing, but they’re not.

Where a co-borrower that's a spouse can combine their income with yours to help you qualify for a car loan, a cosigner gives you a boost if your credit score doesn’t meet the lender requirements. Other differences are that cosigners don’t own the vehicle with you, and can’t combine their income with yours.

Now that you know you don’t have to give up hope if your income or credit doesn’t quite meet the lender’s requirements, you need to find the right lender for you and your co-borrower to work with. As we noted earlier, if you’re struggling with bad credit, you’re going to want to find a subprime lender that specializes in helping people get the auto loan they need even with bad credit, no credit, or bankruptcy.

These lenders only work through special finance dealerships, and these dealers can be hard to spot if you don’t know what you’re looking for. Luckily, at Auto Credit Express, we work with an extensive network of these dealerships all across the country, and we want to help you get connected to one in your area.

It’s simple to get the process started! Just fill out our fast and free car loan request form, and we’ll get to work for you!