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Being a cosigner can be risky, especially when dealing with subprime credit and high risk car loans lenders. It can also be the only option in some situations, so is it a good idea? Before anyone agrees to become a cosigner on someone elses high risk car loans, they really need to know as much as possible about the situation. They also need to know about everything and everything that could affect them personally when it comes to signing on high risk auto loans for someone else.
Cosigners for High Risk Car Loans
We at Valley Auto Loans understand high risk auto loans, and we make it our mission to make sure that everyone is fully informed and prepared to take on such responsibilities. In some cases, a loan applicant will be denied for a high risk loan due to their poor credit. In this case, a person with good credit must step in to offer their credit as an alternative or the applicant must work on credit re establishment. Those with good credit can usually qualify and be entered into to the finance contract in either of two ways: as a co-buyer, or a cosigner for high risk auto loans.
Co-Buyer and Co-Signer Similarities
1. Both types are responsible for the loan and are considered co-buyers, with the primary borrower. If the primary borrower fails to meet the loan requirements, co-buyers and cosigners then must make the loan payments.
2. Both types must place their signature on the loan contract.
3. Along with the primary borrower, both types can be subjected to a collection if the loan goes into default.
4. High Risk Auto Lenders will review and analyze the credit of both the borrower and co-borrower.
Co-Buyer and Co-Signer Differences
1. Lenders name a co-borrower as either a cosigner or a co-buyer based upon their income in comparison to the primary borrower.
2. A co-buyers income amount can be added to the primary buyer’s if their income is not high enough to qualify them for a certain loan.
3. A cosigner’s income cannot be added to the primary buyer’s however. Instead both parties’ incomes must qualify separately.
It is far easier to be approved as a cosigner if you are closely related to the primary borrower. For example, spouses are almost always approved to the ease of income-mingling when it comes to high risk auto lenders.
High Risk Car Loans & Co-Borrower Responsibilities
For those considering becoming a co-borrower, consider these facts:
Co-borrowers bear full responsibility for the loan in the event that the primary borrower fails to follow the loan’s requirements.Co-borrower’s credit can be lowered if the loan has a negative end result, (Failure to make payments or other contract breach).Becoming a co-borrower can be the only available option if someone you know needs a loan, and if you have a good credit score and the ability to make the payments if the primary borrower cannot, then it is an easy issue. However if you also fail to meet the requirements of the contract, it can greatly damage your credit. We at Valley Auto Loans want you to know that even those with bad credit can be approved for a high risk finance loan instantly. If co-borrowing or needing a co-borrower is a risky deal for you, we can help. Apply for a loan from Valley Auto Loans today and see just how easy it is to gain a loan, even with bad credit.
High Risk Auto Loans – Next Steps
Consumers with a high credit score and good credit history generally qualify for car loans without facing any serious difficulties. However, the entire structure of the auto lending system is designed in a way that can very easily dishearten and demoralize consumers with poor credit. All said and done, this should not be considered to be the end of the world because people with credit problems can take several corrective measures to increase their chances for approval in the future.
Finding Dealers to Work With
Every locality in the United States has plenty of auto dealers. However, for poor credit borrowers, it is difficult to find dealers who have partnerships with the most efficient poor credit lenders. Most of the sources of bad credit auto loans around us are those who only have tote the note car loans to offer. The biggest disadvantage of dealing with them is that they do not report any of their loans to the credit bureaus. As a result, their customers will never see an improvement in their car credit, even if they maintain an excellent payment record. Therefore, this problem relating to high risk auto lenders will still remain in their life when they decide to buy their next car.
One more reason to avoid these dealers is that these dealers have no affiliation with the franchisees of any dealership offering new cars. Most of the cars available in these dealerships are older, unreliable, and have a high mileage. Many legitimate new car dealers and high risk auto lenders are also reluctant to deal with poor credit customers because it requires specialized training for all employees.
In this scenario, the best alternative is to spend some time in the internet looking for auto dealerships. There are many websites that offer specialized service and can very easily offer a huge spectrum of lending alternatives for bad credit borrowers. The major advantages of dealing with such companies include selection of a car from a huge inventory; all the payment and loan information are reported on time to the credit bureaus, reasonable mileage, and low repair bills.
Valley Auto Loans can be your ideal online destination to start looking for hassle free auto loan that satisfies all your needs. We are the number one auto loan service provider in the country with a specialized service for poor credit consumers. Apply today and qualify for your auto loan within just 60 seconds.
According to Experian and Trans Union (two of the three big reporting agencies), as of July, 2013, the average FICO score in the U.S. was 648. They also go on to say that more than 50 percent of the population have one or more dings on their credit reports.
What Qualifies a Person for High Risk Auto Loans?
Your credit score is a numerical reflection of your entire credit profile. The three credit reporting agencies (Equifax, Experian, TransUnion) have a so called “secret formula” for calculating this number.
Risk levels are expressed in ranges. Lets look at how the reporting agencies and high risk loan companies rate each range:
726-850 Very Low Risk
700-725 Low Risk
626-699 Medium Risk
551-625 High Risk
350-550 Very High Risk
So, it’s easy to see that anyone with a score below 626 is considered high risk.
Do you know your credit score? 70 percent of the people don’t, so you’re not alone. Knowing your credit score is advantageous. What if your credit score is 540? You’re only 10 points away from the next higher bracket.
You’ll find ample sources online that will guide you in making corrections to your credit reports and offer other suggestions, which are simple to do and will raise your credit score by 10 points or more.
Who Are High Risk Auto Loan Lenders?
You’ll find that banks and traditional institutions are not good high risk auto loan lenders.
At Valley Auto Loans we have a network of lenders that specialize in high risk auto loans. We have helped thousands of customers with credit challenges, who came to us dejected and frustrated, because they were having trouble getting a car loan. With a 100 percent acceptance rate, we were able to get these customers the loan they needed.
Here’s the problem with doing it yourself – you can damage your credit even further.
When you put in application after application with each lender, you activate an inquiry against your credit file. Too many inquires in a short time frame can negatively impact your score; unknowingly, you can hurt your credit score even more by doing this.
At Valley Auto Loans we run your application once, which only activates one inquiry. We can then send your application to our loan network to find the best car loan for your needs among our group of high risk auto loan lenders.
Do you see the advantage we have over our competitors?
Things You Should Know About High Risk Loan Lenders
You need to make an informed decision. We believe in providing you with all aspects of high risk lending. Even though our success rate is nearly flawless in getting loans for high risk customers, there are still some things you should know.
Interest rates will be higher. Looking at it from the lenders point of view, high risk is offset by higher interest rates.
Down payments can be a bit higher. This isn’t carved in stone, but the lender will usually require a higher down payment (10-30 percent) compared to lower risk customers.
Even among high risk loan lenders there’s competition. Since we have a network of lenders, we can help all our high risk customers find the best rates and terms the market has to offer.
Buying a car should be a pleasurable experience. Let us help you make buying your next car a stress free, pleasurable experience, with our high risk auto loans application - Apply online today!