Use Your Spouse’s Income to Qualify for a Car Loan

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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.

, - December 26, 2018

You can combine (comingle) incomes for a car loan with your husband or wife. When you comingle funds with a co-borrower, it not only makes it easier to get approved, you both could qualify for a better interest rate and lower monthly payment, or a better choice of vehicles.

What’s a Joint Auto Loan?

A joint auto loan is a car loan that’s shared by two borrowers. A primary borrower and a co-borrower are listed on the loan and the title to the vehicle, unlike cosigners, who don’t have ownership rights to the car. In order to jointly apply for an auto loan, lenders typically require a co-borrower to be a spouse.

When you jointly apply for a car loan, both you and your spouse agree to take responsibility for the loan. If one of you fails to pay, the other is going to suffer the same consequences and take a hit to their credit score. Make sure you and your spouse sit down and discuss what it means to take on a joint auto loan, and have a plan of action in the event something happens to either of your financial situations.

Benefits of a Joint Auto Loan

If you can qualify for a car loan by yourself, that’s great! At that point, deciding to have a co-borrower doesn’t need to be a huge concern. But, if you find you fall short of qualifying, adding your spouse to the loan application can improve your approval odds. There are three main benefits to jointly applying:

  1. Increases available income – A joint auto loan means the lender combines both you and your spouse’s incomes to determine what you qualify for. If your minimum income is too low, or your debt to income and payment to income ratios are too high, adding your spouse to the loan can help you get a boost.
  2. Credit boost – If your credit score isn’t the best, but your spouse’s credit score is better, having them on a joint auto loan can help you qualify for a better interest rate.
  3. Makes more sense – Many married couples combine funds on big-ticket items, and it simply makes sense to jointly apply for a car loan if they plan on sharing the vehicle and payments.

Complications with a Joint Auto Loan

Deciding to take out a joint auto loan isn’t always sunshine and rainbows. Things happen, and if your relationship goes south, you may find yourself needing to remove either your name or your spouse’s from the loan. If this is the case, the only way you can do this is by refinancing.

In order to refinance, you, alone, need to meet the lender’s income and credit requirements. If you don’t qualify on your own, you could always consider adding a different cosigner to the loan to increase your approval odds.

The Bottom Line

Having a co-borrower on a car loan can come with great benefits such as saving money, getting approved when you otherwise couldn’t, and improving the credit of both borrowers.

If you have bad credit and need an auto loan, and don't have a co-borrower to help, let CarsDirect lead the way. We work with a nationwide network of dealers that have the lending resources available to help people with bad credit get financed. Take the first step today by filling out or free-of-cost car loan request form online.


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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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