Kasey and Green Light Auto Credit did a fantastic job in helping us a great car!
We all need help sometimes; and if you have poor credit, you may end up wondering about the differences of a guarantor vs. cosigner when it comes time to apply for an auto loan around St. Charles or Florissant. Cosigners and guarantors both help guarantee the loan, since they are also responsible for the loan if you fail to pay — but the ways in which they’re responsible are a bit different.
A co-signer is as liable as the primary borrower for paying back the loan, meaning that both parties share equal responsibility. Typically, this option is best if your finances aren’t quite strong enough to deal with the loan on your own. The catch is that the lender has to review the credit histories of both you and your cosigner to approve the loan. With the finances of the cosigner calculated alongside your own, you may be eligible to borrow more money than you would be on your income alone.
A guarantor is very similar to a co-signer, but the nature of the liability for the loan is a little different.
No, you do not. However, a co-signer can be a huge help for those who aren’t strong candidates for an auto loan. If you have a lower credit score, if you are a first-time buyer, or if you have low income, then a co-signer can help you get a much better deal.
The co-signer is a partner in financing, but not ownership. They cannot take possession of your vehicle, even if they start making the payments themselves. That’s because their name is not usually on the title, and only the titleholder owns the vehicle.
No, you do not. But like the co-signer, a guarantor strengthens your case to lenders if you are not a strong candidate for a car loan.
Almost anyone can become a guarantor who is over 21 years of age in good financial standing. You can ask a family member, a friend, or a spouse with a separate bank account. The important thing is that your guarantor is someone who you trust with a record of good financial stability.
Whether you need a cosigner or guarantor, or if you’re able to take a loan out on your own, all of us at Green Light Auto Credit are dedicated to helping drivers throughout the greater St. Louis area get the financing they need, whether they have good credit, bad credit, or no credit history. Contact us online to discuss how we can help you and to get answers to your questions, such as, “Can you remove a cosigner from a car loan?“