Home » Autos and Cars

Why You Might Want To Consider A Cosigner For A Car Loan

Nov 10, 2007
If you have bad credit another solution to car financing is to find a co-signer to apply for the loan with you. Usually, this would be a parent or spouse, but in most cases anyone can co-sign for you. Of course, they need to have good credit to improve your chances of securing the loan.

A co-signer will sign the credit application for your loan, basically saying that they are willing to back you in the purchase of this car. They are agreeing that if, for some reason, you don't make the payments, they will be responsible for re-payment of the loan on the vehicle.

You need to understand that this is a big deal for your co-signer because they are putting their credit score on the line for you. It's important for you to realize that if you don't make your payments, you're not just jeopardizing your credit, but theirs as well. Plus, if you don't make the payments, the car will be repossessed and future liens could be put on their income.

If you are in the position where you need to ask someone to co-sign for you, be very conscientious about what you are asking them to do. Some people just aren't willing to take the risk, so don't be offended if they say no.

Since their name will also be on the loan, it will appear on their credit report too as an additional item. This could also affect their borrowing ability in the future since most lending companies look closely at debt-to-income ratio before they give out money. Carrying too much debt including your car loan could cause them to be turned down when applying for credit.

When you apply with a co-signer, your name and their name will be on the loan. This means the loan is really in the names of two parties at once, but it does benefit you by establishing credit in your name, as it is also in your name too.

Having a co-signer is a risky and delicate matter for many people as it is a gamble for them to trust you completely to fulfill the loan commitment. However, if you are serious about establishing your credit or rebuilding your credit, there's no reason why it has to be such a risk.

One caveat about co-sign loans is there are some real unscrupulous car dealers out there, who lie to you and say you are getting a co-signed loan, but then they trick the cosigner into signing the wrong line of the loan papers and the loan ends up in their name alone.

They pull this scam because they know you would never get approved, and they just want to sell the car, and it happens constantly. The law requires both people to be present and sign at the same time, and you need to make sure the correct names go on the correct lines of the application, identifying you as the borrower, and the co-signer as the co-signer.
About the Author
Gregg Hall is an author living with his beautiful wife and family in Navarre Beach, Florida. Find more about cars as well as car care products at http://www.5starshine.com
Rating:
Please Rate:
(Average: Not rated)
Views: 114
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Buying
    • Selling
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources