You might need to consider getting someone to cosign an auto loan if you are unable to qualify for the credit. Frequently, poor credit or lack of credit history, lack of income, or being able to make a down payment are reasons that a lender would require the borrower to get a cosigner. But co-signing holds a lot of responsibility…even if you’re doing it for a family member or close friend.
Borrowers need credit approval
The co-signer’s good name and credit history provide additional assurance to the lender that the terms of the loan agreement will be honored with payments being made in full and on time.
Equal Responsibility for the Loan
Both the co-signer and primary borrower hold equal responsibility for the signed auto loan. When payments are late or missed, the lender has the right to repossess the vehicle. Credit reports for both the borrower and co-signer will list a negative payment history and the repossession.
Obligation to Satisfy the Deficient Balance
The lender may contact the co-signer, and/or the primary borrower, after a vehicle has been repossessed. The bank, credit union or financial institution will look to the co-signer to bring the account current or satisfy the loan in full. Credit scores may drop as a result and impact existing credit, or make it difficult to obtain new credit for both the borrower and co-signer.
Responsibility transfers to co-signer after default
The responsibility for payment of the loan transfers to the co-signer after primary borrower passes away, loses a job, goes through a divorce, files for bankruptcy, or fails to make scheduled payments.
Seek Legal Help from Consumer Law Attorneys
If you have cosigned an auto loan and the vehicle has been repossessed, seek advice from a qualified consumer protection law firm.
Flitter Milz attorneys are nationally recognized consumer protection lawyers that understand vehicle repossession law and how to help the borrowers after a repossession has occurred. For a no cost consultation, CONTACT US.
Pictured: Flitter Milz Attorneys
Cary Flitter (center), Andy Milz (left), Jody López-Jacobs (right)