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Can having a cosigner lower your car payments?
Does having a cosigner lower your monthly car payments? I want to get a car loan, but the payments are too high. My mother has offered to cosign, but I'm not sure if it will help.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
Having a cosigner may help you get a
car loan
and could help you secure better terms like a lower interest rate or monthly car payment—but it’s not always a guarantee.In some ways, a cosigner will assure you that you’re approved if they have solid credit. However, it’s up to the lender to decide whether you pose a credit risk thereafter.
Keep in mind: If you’re not able to make payments on your car loan, your cosigner will be responsible for the payment—and missed payments could hurt both of your credit scores, so it’s important that both parties are comfortable with the arrangement before signing any paperwork.
Here are a few things you can do to lower your monthly car payment:
- Shop around with lenders, with or without a cosigner, to make sure you’re getting a good deal
- Pick a car that is affordable for your budget—a lower purchase price means you’ll have a lower loan balance with less interest building up
- Make a larger down payment toward your car
Remember to budget for insurance, too: Most lenders require that you have full coverage
car insurance
when you get a new car loan. You’ll have to budget $100 a month or more on top of your loan payment, depending on your age and driving record.While you’re shopping for your car, use the free
Jerry
app to help you find affordable rates hassle-free.View full answer
- Gregory R.
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