A cosigner may or may not need to be present when you sign your car loan documents; it all depends on your lender's requirements. Either way, having a cosigner means asking someone to take on a big responsibility.
A Cosigner's Role in an Auto Loan
When you use a cosigner on an auto loan, someone lends you their good credit status in order to help you get approved for a loan you can't qualify for on your own. Cosigners are most common on bad credit car loans, and, in fact, may even be required if a lender is on the fence about approving your application.
In order to use someone as your cosigner, they have to meet all the lending requirements, even though they're not the primary borrower. This means qualifying not only with their credit, but with their income and employment as well. The reason for this is because a cosigner lends you their credit score and agrees to take over payments if you can't keep up. Lenders need to be sure a cosigner is financially able to do this.
Residency Requirements for Cosigners
Unlike yours, however, the residency requirements of a cosigner aren't typically as important to a lender, as long as they're U.S. citizens, residing in the United States. This is why a cosigner may not have to be present to sign an auto loan. Since the vehicle isn't going to be theirs, some lenders don't mind if your cosigner lives elsewhere, even out of state.
In the event that your cosigner isn't someone that can accompany you to the dealership, a lender may allow them to submit signatures on the required documents via fax, but most require an original signature. This means the loan could take longer than normal to be completed since loan documents must be mailed.
When a cosigner isn't present with you, they're going to be required to have their signature notarized. Notary publics can be found in many locations: often at banks, credit unions, and post offices, for example. Once the notarized documents are returned to the finance manager, you can proceed to finish the lending process.
CarsDirect Tip: Each lender has their own rules and regulations regarding cosigner requirements. Not all lenders may allow your cosigner to be absent at the loan signing, so keep that in mind when you consider asking someone to cosign. Also, in today's digital era, there may be provisions in place for some lenders to accept electronic signatures, so be sure to talk to your lender about all the details before you choose your cosigner.
Do You Need a Cosigner?
If you're ready to find your next car loan but worry your credit isn't in the best shape, it's a good idea to have a cosigner on hand before you apply for an auto loan. This way, if you find out for sure that you can't go it alone, you have someone in your corner ready to step in.
As a bad credit borrower, you may not know where to start in your search for a car loan, but we do. At CarsDirect, we work with a coast-to-coast network of special finance dealers that have the lenders available to help people in unique credit situations. To get started on the path toward your next vehicle, simply fill out our easy, free, zero-obligation auto loan request form, and we'll get to work matching you with a local dealership.
