If you already know your credit is bad or you have been turned down for auto loans with bad credit, Munstead Lavender adding a cosigner to your loan application might be a good option to help you get approved. It used to be that a cosigner was only a viable option if you didn't have any credit history at all. Typically it would be a parent cosigning for their son or daughter on their first auto loan. Now days many sub prime lenders are allowing you to add a cosigner to your application to help you get approved. Sub prime loans are a huge profit center for these banks because they can hold larger margins than on their conventional prime loans. They are always looking for ways to approve auto loans with bad credit and allowing you to add a cosigner can often times turn a decline into an approval. Here are some of the things they will be looking for in a cosigner.
1) Stability- Sub prime lenders love stability so when looking for a cosigner try to find someone who brings more stability to the application than you do. Having good residence time is a huge plus. If they have been living at the same address for 15 or 20 years chances are that if you get behind on the payments and they call the cosigner they will answer the phone at that address. Although there are no guarantees that they will still live there the chances are very good that they will. Having good job time is also a plus. If your cosigner has a really good job that they have been at for years and years it is relatively safe for the lender to assume that they will continue to be working there in the future.
2) Income- When a lender considers a cosigner they want to know that the person cosigning has the ability to make the payments on their own. In the event that you stop making payments they will call on the cosigner to keep the loan current. Try to find someone who makes the same or more money than you do or who has very little debt of their own.
3) Better Credit- Although not a requirement if you have someone to cosign that has good credit you will greatly increase your chances for approval. If your cosigner has good credit the lender not only knows their financial situation is stable, but also that they will want to protect their good credit. If you get behind on the payments chances are pretty good that if the lender calls them they will bring the loan current to avoid negative impact on their own personal credit report.
4) Live at the same address- Again not always a requirement but having a cosigner that lives at the same address is a great way to increase your chances for approval. This helps in a couple of ways. Number one if you live at the same address many times the lender will combine both of your incomes when calculating their debt ratios. This alone may turn your decline into an approval if you had been turned down for out of line debt to income ratios on your own. This may also even allow you to get approved for a higher payment than you originally applied for because you have two incomes in the household rather than one. Number two it usually would indicate that you are a couple and will be working together to keep this loan current.
Use these examples as a guide when trying to find a cosigner. Picking the right one can really make the difference and turn a decline into an approval.
This author has over 20 years of automotive finance experience, specializing in auto loans with bad credit. You can visit http://www.autoloanswithbadcreditnow.com to get approved right now. Our lending partners boast a 99% acceptance rate. Simply click on one of our banners to get approved in minutes.
No comments:
Post a Comment