{"id":1026,"date":"2021-02-09T14:10:00","date_gmt":"2021-02-09T14:10:00","guid":{"rendered":"http:\/\/tt-blogs.dealerfire.com\/carizmalubbock\/?p=1026"},"modified":"2024-02-14T21:36:37","modified_gmt":"2024-02-14T21:36:37","slug":"what-does-a-co-signer-do-for-a-car-loan","status":"publish","type":"post","link":"https:\/\/www.carizmalubbock.com\/blog\/what-does-a-co-signer-do-for-a-car-loan\/","title":{"rendered":"A co-signer can be useful, but there are risks to be aware of"},"content":{"rendered":"

What does a co-signer do for a car loan?<\/span> <\/span><\/h2>\n

Very few people are going to be able to come up with several thousand dollars to buy a car, truck or SUV. Most Carizma Motors customers are not only coming to our dealership with the goal of buyin<\/span>g<\/span> a new (to them)<\/span> vehicle but also <\/span>looking for the most affordable financing options available<\/a> to them. One of the ways <\/span>someone with a low credit score can find a loan is to have another person with a higher credit profile act as a co-signer. So, what does a co-signer do for a car loan? <\/span>A co-signer isn\u2019t a character reference. Someone acting in this role is essentially promising to take over the payments if the primary borrower falls behind on the load. Let\u2019s tak<\/span>e<\/span> a closer look at a <\/span>few other help<\/span>ful pieces of information.<\/span> <\/span><\/p>\n

READ MORE: Which is better, buying or leasing?<\/a><\/span><\/strong> <\/span><\/p>\n\n\n

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Risks Faced by a Loan Co-Signer <\/h3>\n\n\n\n

As we said earlier, the co-signer of any loan is going to be viewed as just as responsible for making payments as the primary borrower on the loan<\/a>. However, the co-signing party will only be required to make payments if the primary borrow falls behind. Agreeing to co-sign a loan requires a lot of trust and a lot or relationships have been damaged by the primary borrow defaulting on their payments.  <\/p>\n\n\n\n

The co-signer’s credit profile could be damaged if the primary borrow misses a payment, and the very act of having a hard pull done on the co-signer’s credit could negatively affect their score \u2013 mostly because of the increase in debt-to-income ratio. Additionally, if the primary borrow does fall behind on loan payments, the co-signer will be responsible for paying for late fees and collections fees, as well as the regular payments.  <\/p>\n<\/div>\n\n\n\n

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