The process of getting an auto loan with bad credit can be a difficult one. Although here at Auto Credit Express we have years of helping people overcome their difficult credit circumstances, there are even some people with credit so tarnished that even we have difficulty finding them low finance rates. For these people, we recommend looking for a cosigner. But what should you look for in a cosigner?
The Ins and Outs of a Good Co-Signer
A co-signer is someone that signs their name on your agreement with the dealer, and in doing so often lends their better credit to the car buying process, even covering up your bad credit in the process. By doing that however, they are also agreeing to share the burden of the loan, which means they can be responsible for payments you miss! As you can see, this is not an agreement to take on lightly, and both parties should understand their requirements before agreeing to sign.
When it comes to finding a good cosigner, the worst thing you can do is to rush to the first person you think of and ask them to be your cosigner. There are some important factors to consider for a co-signer when looking for someone you can depend on to help you cosign a loan.
- Is their credit in fair shape?
One of the biggest advantages of co-signing is it allows you to carry someone elses credit rating into the process to help cover up how damaged yours might be. However if both of you have damaged credit, chances are you still won't get the rates you want or the loan at all.
- Do they have a steady job and stable income?
If the person you are thinking of has been at their job for a year or more, and they're income is regular, they may be a good choice. On the other hand, if they change jobs frequently or go through periods without a paycheck, it's probably in your best interests to find someone else.
- Do they have a lot of financial burdens already?
If they already have many things to pay for each month, they may not be able to handle another payment if you fail to pay yours for some reason. Think twice if your future hardship could mean even more hardship for your friend of family before you ask them.
- How is your relationship?
Being a cosigner is a major responsibility. Your cosigner should have a good relationship with you and faith that you will be able to meet your end of the financial requirements. If you miss a payment and they end up paying for you, will it ruin your relationship? Or will you be able to work it out.
Keep in mind that the person cosigning on your loan is doing you a huge favor just by getting you approved. Be sure that you are doing everything you can to keep them from ever having to assume your debt. Otherwise they'll be the one paying for your car and that probably won't end well for anyone.
As We See It
It is easier for most people who are struggling with a tight budget to find a cosigner than it is to pull together a healthy amount of cash for a down payment. However choosing the right person for a cosigner may not always be the easiest thing. Hopefully with these few tips, you'll have a better idea of what to think of when you look for yours.
Even if you haven't quite found someone yet, you can get the help of some experts near you by completing our quick and easy application. We'll find dealers and lenders in your local area that will be able to best serve you and guide you through all parts of your car buying experience. Make it happen by applying today!