Benefits To Having A Co-signer On Your Loan
No. We’re not saying you should get two loans for your car. We’re saying maybe you should get a loan buddy–better known as a loan co-signer.
If you’re shopping for a car but have bad credit, or are too young to have real credit history, getting a car loan can be difficult. That’s where your loan buddy comes in.
If you have a close friend or family member with good credit, willing to have a little faith in you, it’ll go a long way towards your auto loan. Their great credit score will effectively stand in for your less great (or even terrible) score. It’s like temporarily having an awesome, or at least better, credit score. Fake it ’til you make!
Better Loan Terms
Not only will you be more likely to get a loan, you may have access to a bigger loan with better terms. A lower interest rate means you can pay more toward principle. Pay off your loan quicker, while improving your credit and personal relationships. Especially personal relationships. Co-signing is a big leap of faith, they’ll be relieved and delighted the faster you can pay it off!
More Money, Better Value
Having a higher credit score is great. Having a co-signer on your loan also means your application will show two incomes, so you may be able to get a loan for more money.
This will allow you to get a better car that will better suit you, last longer and having a higher value when you’re ready to trade-in again.
This doesn’t mean go crazy and buy a car you can’t afford, it just means you don’t have to settle for the cheapest piece of junk you can find. Make sure you can afford the payment on your own!
Building your Credit
Your co-signer can help you get a loan today that you might not have otherwise been able to get. The benefit to having a co-signer doesn’t end here, though.
While you were able to use their credit score to leap frog over your own, the loan still counts toward your credit score. As long as you continue to make on-time payments on your loan, your credit score will improve. Given enough time, you might not need a co-signer on your next auto loan!
Don’t Be a Jerk
A co-signer is putting a lot of faith in you. When they sign the loan, they’re agreeing to be responsible for it in the event you can’t pay it.
That does not mean they want to. It means they trust you.
If you’re fortunate enough to have a friend or family member willing to co-sign on your loan, do not leave them hanging. The next time you need a loan, it’ll be every bit as difficult to get one and you’ll probably be on your own.
Stuff happens. Life can be unfair, its twists and turns leaving you in less than ideal circumstances. Fortunately, you don’t have to go it alone! Grab your loan buddy and get pre-approved in 60-seconds or less!