Who can be a cosigner for a car loan?
I want to get a car loan with my credit union and my loan officer told me I'd definitely need a cosigner. Who can be a cosigner for a car loan?
Anyone can be a cosigner on a loan, as becoming one isn’t limited to family members or other restrictions. The only thing a cosigner must have is both good credit and steady income, and they should be willing to take over payments should you default on the loan or be unable to make payments.
A good car loan cosigner will usually need to have a credit score of at least 670 and possess a debt-to-income ratio of 43% or below, which makes them more attractive candidates for lenders.
Since you’re getting a cosigner, you might also want to address your own credit score so that you won’t need a cosigner in the future. Pay down any excessive debt and pay off any delinquent or derogatory accounts to see your credit score rise steadily. And always make sure to make your car payments on time.
Budgeting is an important part of boosting your credit score so you don’t need a cosigner later. Make sure to plan for gas, maintenance, and car insurance. Whenever you finance a car, lenders will require full coverage, so use the Jerry app to help you find low rates on car insurance. Jerry compares personalized rates from more than 50 top providers and delivers the best deals to your phone in minutes for free. The average Jerry driver saves $879 a year on car insurance!
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