Without strong credit scores and stable income, loan approval can be a real challenge. Attaining a co-signer can increase the attractiveness of your loan to the lender. At Instant Financial Group, we don’t require that you have a co-signer; however, having one can lead to better interest rates! So, in the interest of getting you the best possible loan and ensuring your success, here’s what you need to know about co-signers.
What is a Co-signer?
A co-signer is an individual who applies for a loan with you and agrees to settle the debt, should you stop making payments. Regarding the loan application, the co-signer signs the physical or electronic copy and guarantees the loan. This means even though you’re not an ideal loan candidate, your co-signer is, which makes the loan more appealing to lenders.
How Do I Find a Co-signer?
This individual should want to see you succeed with the goal you’re striving to achieve through the loan and know you well enough they’re willing to take the risk. Friends and family are potential candidates as they’ll have strong personal connections and are more likely to take risks to better you. It’s also important to note, even if you find someone willing to co-sign, THEY MUST BE FINANCIALLY SECURE themselves. It won’t benefit your loan application to have a co-signer with bad credit or an unstable job.
Don’t be surprised if nobody jumps out of their seat to volunteer as your co-signer. It’s a huge responsibility to take on and the person still has their own life to support financially, and potentially that of a family.
To increase your chances of finding someone to co-sign for you, it’s essential that you be candid with them about your financial situation. A person will be more likely to cosign if they’re aware of your job details and know you are serious about repaying the loan yourself.
It’s also critical that you are fully informed with every aspect of the loan process, such as monthly payments, interest costs and other details. Find out if the co-signer can be released after a certain number of on-time payments. This can go a long way in giving someone the peace of mind to co-sign for you.