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The approval chances of a borrower with bad credit score can be increased significantly by using a co-signer. A co-signer is basically an individual who guarantees that the borrower will pay all the EMIs on time and also assures that in case of default, he/she will pay the pending loan amount. Finding a reliable co-signer is not an easy task as people generally hesitate to take the responsibility of repaying a car loan amount in case of default. Most of the times, people don’t turn up to become a loan guarantor.
Even if the borrower manages to arrange for a co-signer, everybody is not allowed to sign a loan agreement with the borrower. The co-signer can be anybody from the list of family members and friends of the borrower. He/she needn’t be a blood relative. Old family members of the borrower or other relatives or friends who have a sound job history and solid credit record are considered to be eligible as a guarantor. But there are a few eligibility criteria that a person needs to fulfil to become a co-signer for any borrower who is not having a good credit history and repayment ability.
Whether you are a borrower with poor credit history, a student, a first-time driver or anybody who is not considered to be eligible for a car loan, you can arrange for a co-signer to increase the loan approval chances. Here are the benefits of using a co-signer while applying for a car loan:
As told earlier, everybody is not eligible to become a car loan co-signer. There are a few basic criteria mandated by the banks which a person needs to fulfil for becoming a car loan guarantor. Here are the basic requirements for co-signing a car loan:
So, these are the basic requirements for co-signing a car loan in India. But just meeting these basic requirements is not enough for becoming eligible as a co-signer. A co-signer will be the person who will be equally responsible to pay the loan amount and the EMIs on time if you fail to pay that and this is why the person must be well aware of his/her responsibility before signing the agreement. Moreover, the credit history and the credit record of the guarantor will get negatively affected if the payments are missed and positively in case of consistent and timely payment.