If you are student in need of a bad credit car loan, finding a good deal can prove to be a big challenge. Many lending companies prefer customers with good credit so customers with an unimpressive rating can be declined. However, there is a way to improve your chance of getting an approval. How so? On this post, let’s take a look at some tips that can help you if you need a co-signer to get approved for a student car loans.
A co-signer must have good credit. Needless to say, the person who will be providing a guarantee should credit-worthy in the eyes of lenders. Some lenders are looking for co-signers with a FICO score of at least 700 or above. This is because a higher credit score is a good indicator that the individual is capable of managing debt and credit. If your parent or guardian has an excellent credit score, then he/she is the perfect candidate to co-sign your student car loan.
A co-signer must have a stable job. Lenders are also looking for co-signers who can show proof of a reliable source of income. If your co-signer is unemployed, then lenders may doubt his/her capability to take over the repayment of the car loan in the event that you default.
A co-signer must have permanent residence. The person who will co-sign a bad credit car loan must also have a permanent residence. If your co-signer has been moving from one location or residence to another within the past three years, a lender may consider it as a sign of financial instability.
Co-signing is a serious responsibility. Co-signing a bad credit car loan, or any type of loan is not a joking matter. Once you agree to co-sign a loan, you accept the obligation to take over repayment in case the original borrower fails to keep up with repayment. Obviously, finding a co-signer who will be willing to guarantee your car loan repayment can be difficult unless you ask help from your parent, guardian, relative or a close friend.
Ask for a better rate. Once you have found the perfect person to co-sign your bad credit student car loan, don’t forget to request the lender for a lower interest rate or a more flexible repayment term. Lenders would be willing to adjust the terms if the loan is co-signed by a person with solid credit history.
Stay true to your repayment obligations. Even though your co-signer is responsible to continue repayment if you fail to do so, you do not want to put your co-signer in a dreadful situation. See to it that you will be able to keep up with your monthly car loan payments. If you are having difficulty in paying off your student car loan, speak with your co-signer about the problem right away, instead of trying to hide the real situation or ignoring the problem.
Read the fine print. Before signing up your student bad credit car loan agreement, see to it that you and your co-signer have read the terms and conditions to avoid unpleasant surprises later on.