A cosigner is a powerful asset for car buyers. If done properly, using a cosigner on an auto loan with bad credit, or no credit, and low income can make the issue of having poor or no credit history virtually moot. By applying for a bad credit auto loan with a cosigner on your application, the dealership or lender will assess the risk factor in providing you with an auto loan based on the cosigner’s credit rating and not your own.
When looking for a cosigner, someone with a good credit history and steady income will provide you with the greatest benefit. Remember, the higher the credit score and income the cosigner has, the better for you. This is because the auto loan’s interest rate will now be based on the credit records and income of the person cosigning your auto loan. Having a cosigner with a high credit score and income give you room to negotiate for a lower rate of interest on your car loan, since the lender’s risk is significantly lowered. It is still important to remember, however, that if you fail to make your monthly car loan payments, your cosigner becomes liable to repay the balance due on the car loan for you. Because of this, the cosigner should only cosign for the auto loan if he or she is able to afford paying for the loan in the event of your default.
Having access to a cosigner makes qualifying for an auto loan with bad credit possible, even if you have a low income or are a first-time auto loan buyer. Just remember not to rush into any new car loan without first weighing your options. Always take a close look at the terms, length of the loan, and interest rates before choosing whom to work with. Lastly, you can get connected right now to a lender or dealer who wants to help you right now, online. CarLoanMarket.com is a quality site that can get you connected with a local car dealer or lender who understands sub-prime financing and can help you even if you have credit challenges — especially if you have a cosigner to help. All it takes is a few minutes to complete a simple credit application.
Have a cosigner? Check CarLoanMarket.com to see how a cosigner can help you. Get FREE, No Obligation car loan options from one of our lender or dealer partners!