What is the guarantor on a car loan?

I applied for a car loan and they told me I'd need a cosigner or a guarantor to get the loan. I know what a cosigner is, but what's a guarantor?

The role of a guarantor for a car loan is similar to that of a cosigner, but the liability is different.
Like a cosigner, a guarantor agrees to pay back the car loan if you default, but only after you’ve been pursued in every legal way first.
The lender also doesn’t check the credit score of the guarantor and doesn’t include them as part of the loan itself. As a result, the guarantor can’t help you get a better interest rate, unlike a cosigner.
If your credit isn’t quite good enough to get the loan on your own, both guarantors and cosigners can provide the security the lender requires to close the deal.
Once you’ve secured the loan, remember that you should also budget for car insurance. Through the Jerry app, you can compare rates from different carriers to find the best full coverage auto insurance for your budget.
Eric Schad
Answered on Nov 15, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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