How to choose the Right Co-Signer for your Car Loan?

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<h1>How to choose the Right Co-Signer for your Car Loan?</h1><strong> Author: <a href='http://www.articleseen.com/profile_Jeffery Reynolds.aspx'>Jeffery Reynolds</a></strong><br /><p>What is the meaning of a co-signer? He/she is as an individual who: >>Signs the loan contract with the borrower; >>Is obligated to repay the loan if the borrower does not make payments; >>Has the joint liability for making regular payments; and >>Has no right to the vehicle. How is a co-signer different from a co-applicant? A co-applicant(co-borrower) assumes the same responsibility as a co-signer but he/she enjoys the benefit of ownership. A co-applicant has right to the car. Who needs a co-signer? Car buyers who do not have a strong credit application require a co-signer because he/she ensures the lender of regular payments and reduces the lender’s risk. So, a co-signer is often considered a boon by following people because he/she helps them in securing quick finance: >>Young car buyers with no credit history >>People with terrible credit score >>People with low income >>Car buyers with short employment history >>Car buyers with repossession or bankruptcy in the past Is a co-signer needed for a “joint car loan”? A car loan is considered a “joint car loan” if the following applicants are involved: 1. A primary borrower 2. A co-applicant or aco-borrower If both the applicants have credit issues or any other financial problem, lenders make co-signing compulsory. Who is eligible to become a co-signer? Usually, parents co-sign car loans for their children. It is for this reason many people believe that the only criterion for becoming a co-signer is to be the relative of the borrower. But, it is a myth. Following are the criteria for becoming a co-signer: Preparedness to Co-Sign Many people will be ready to inform the lenders about their willingness to become your co-signer. But, just an informal promise or a verbal agreement is not enough to become a co-signer. So, ensure that your co-signer is prepared to sign the loan contract and is willing to assume the responsibility of your car loan. Good Credit Score A co-signer is required to have a good credit score. He/she must pay bills on time and have an experience of obtaining a variety of debts such as mortgage loans, credit card debts, personal loans, etc. Usually, lenders require a co-signer to have a credit history of at least five years. So, make sure that you check the prospective co-signer’s credit history before talking to the lender. Ability to Repay the Loan Lenders don’t allow anyone to become a co-signer. A person can co-sign your loan contract if he/shecan repay the loan. Your co-signer needs to submit the financial documents to the lenders so that they can check his/her financial situation: 1. Bank statements 2. Property details 3. Ongoing loan information 4. Pay-stubs 5. IT returns (if the co-signer is self-employed) Employment and Residential Stability If your co-signer switches jobs frequently, lenders will consider his/her employment status unstable and reject your loan application. It is because lenders want a co-signer to have a stable employment. Also, lenders require a co-signer to have a stable residence history. It is ideal if your prospective co-signer is residing at the same address for at least two years. So, these are the criteria for becoming a co-signer. If your lender has asked to bring a co-signer, don’t forget to use them. It will help you in choosing the right co-signer for your car loan.</p><strong>About the Author:</strong><br />Don’t worry if you cannot find a co-signer. Car Destination will help you in obtaining quick <a rel="nofollow" href="http://www.cardestination.com/no-credit-no-cosigner-auto-loans.html">no credit no co-signer auto loans</a>. To apply with the online <a rel="nofollow" href="http://www.cardestination.com/">bad credit auto loan specialist</a>, simply submit an auto loan request on the secure website. We will send you low-rate loan quotes instantly. <p> Article Source: <a href='http://www.articleseen.com/Article_How-to-choose-the-Right-Co-Signer-for-your-Car-Loan_319337.aspx'> http://www.articleseen.com/Article_How to choose the Right Co-Signer for your Car Loan?_319337.aspx</a></p>

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Keywords : Right to vehicle, repay loan, young car buyer, no credit history, terrible credit score, low income, short employment histor,

Category : Finance : Loans