Cosigner Requirement Questions Answered

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - August 10, 2018

If you have bad credit, a lender may require you to have a cosigner in order to approve you for a car loan. But what exactly is a cosigner? We’re here to answer some basic cosigner questions you may have.

What’s a Cosigner?

A cosigner is someone – typically a close friend or family member with good credit – whose credit score can help a borrower with bad credit get approved for a car loan. Their main role is to help the primary borrower get approved for an auto loan by allowing them to “borrow” good credit.

When a cosigner signs on a loan, they’re also agreeing to pay for the loan in the event the primary borrower is unable to. Even though the cosigner is listed on the loan, they don’t have any legal rights to the car. In order to be considered, the potential cosigner must have good credit (somewhere in the 700s or above is typical) and meet the income requirements of the lender.

Other Questions about Cosigners

Now that you know what a cosigner is, you may have some additional questions about cosigner requirements. Here are some of the most common questions potential car buyers ask:

Q: Can my cosigner be from out of state?

A: For the most part, lenders aren’t concerned about where your cosigner lives as long as they have great credit. So, yes, they can be from another state. But, depending on where you apply for the loan, the lender may require your cosigner to be present at the close to sign the documents. Others may be okay with your cosigner faxing signed documents, but the documents must go through a notary to verify and notarize the cosigner’s signature.

Q: Does my cosigner have to be a US citizen?

A: Yes, your potential cosigner must be a US citizen in order to cosign a car loan. A lawful permanent resident won’t cut it because they aren’t technically a US citizen.

Q: Can my cosigner live with me?

A: Yes, they can live with you. Where they live isn’t much of a concern to the lender, unless you’re married to them. In this case, they become a co-borrower instead of a cosigner, and your incomes can be combined to qualify and they have equal rights to the vehicle.

Q: Can my cosigner be on disability or retired?

A: Yes, as long as they have good credit, most lenders won’t ask how they’re able to pay for the loan in case you default. But, if this is your cosigner’s only income source, and you have problems, the lender will go to your cosigner to make the payments. Make sure your cosigner knows they’re responsible for loan payments in case of an emergency.

Ready for an Auto Loan?

If you’ve weighed all your options, and have a potential cosigner ready, but aren’t sure where to start your car buying journey, we want to help.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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