On occasion, you may not be able to qualify for a bad credit or no credit auto loan without a co-signer or co-buyer. Before asking someone to take on that responsibility, you should know what their role and expectations will be. Here are a few of the things that you should be aware of.
- A co-signer and co-buyer are both considered co-borrowers. That makes them equally responsible for your loan. Both are required to make loan payments if you do not.
- Co-borrowers names appear on the loan contract and they must sign all loan documents.
- The person helping you will be subject to any collection actions if the loan goes into default.
- A co-buyer is usually a spouse whose income can be lumped together with the buyer’s. A co-signer is usually some other relative whose income must meet the lenders income guidelines on its own.
Before asking someone to co-sign a Colorado bad credit auto loan, you should be aware of what you are asking of them. You should also be aware that defaulting on a co-signed loan could cause major problems within your family. Be sure you can afford the loan before asking for help.