How Another Person Can Help You With an Auto Loan

Get Car Financing
Even with poor credit.

By

Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


, Contributing Writer - November 11, 2020

When you want to improve your chances of getting an auto loan, there are a few ways to go about it. Two of them – co-borrowers and cosigners – may sound similar, but they help you out in very different ways.

What Does a Co-Borrower on a Car Loan Do?

A co-borrower helps when you don't have the income to meet lender requirements. They're also helpful once you have the loan because they share both the car loan and vehicle ownership with you – you're equally responsible for the car and it's payments. Both of your credit scores can also be impacted by how the loan is handled.

Co-borrowers increase the amount of income you put on your auto loan application. Most lenders only accept co-borrowers on a car loan if they’re spouses or life partners, since their incomes can be combined to qualify together.

However, when it comes to meeting credit score requirements, a co-borrower isn't helpful. Lenders don't combine your credit scores to form a "super score," the lowest credit score is generally used to determine eligibility and, often, the interest rate, too.

If you need help meeting income requirements, a co-borrower is what you need. But if your bad credit score is the thing that needs a helping hand, consider a cosigner instead.

Get a Cosigner to Help With Bad Credit

Cosigners lend you their good credit score to increase your auto loan approval odds. They don't help you meet income requirements, but they boost your approval odds by promising to pay for the car loan if you can’t, which may lower your chance of default.

Unlike a co-borrower, a cosigner doesn’t get any rights to the vehicle and they’re not responsible for the car payments – that’s all on you.

Both of your credit scores are impacted by how you handle the loan. If you start to miss payments, or you’re unable to pay, the lender asks the cosigner to pick up the slack. If your cosigner can’t swing it, then you risk default and subsequent repossession, which hits both of your credit reports.

A cosigner risks a lot by helping you get approved for an auto loan with their good credit score. For a cosigner to be any help on your car loan application, their credit score should be better than yours. It also works to your advantage if their credit score is above 660, since a score lower than that is usually considered poor.

Don’t Have a Helping Hand?

If you need a vehicle but don’t have a life partner, spouse, or anyone that can help you out for your next auto loan, then consider a subprime car loan from a special finance dealership. These lenders assist borrowers in unique credit situations, like bad credit, no credit, and even bankruptcies.

Subprime lenders look at more than just your credit score because your financial stability is more than just a three-digit number. Finding a subprime lender can be simple if you work with us at CarsDirect.

We’ve cultivated a network of dealers that are signed up with them, so complete our free auto loan request form right now and we’ll look for a special finance dealership in your local area.

Free Credit Score

Get your free credit score now! Get a copy of your most recent credit score.

Get Your Free Score

Auto Insurance

Get competitive quotes on insurance in your area.

Vehicle Warranty

Protect your vehicle and you could save thousands on auto repairs.

Get a Free Quote

Need a Car Loan?

It only takes a minute.

, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.


Loan approval is not guaranteed and is subject to credit application and approval of the lender. Individual loan terms may vary. Use of this website constitutes acceptance of CarsDirect.com's Terms of Use, Disclaimer, Privacy Policy, and Cookie Policy.

Privacy Policy|Do Not Sell My Personal Information|Terms of Use|Cookie Policy|Disclaimer|
COPYRIGHT 1999-2020 MH Sub I, LLC dba CarsDirect.com