If you’re considering getting a title loan with a cosigner or agreeing to become a cosigner to someone else’s title loan, this post is for you! Sometimes you may need to pay your bills fast, cope with an emergency, or manage your debts, but your low credit score or compromised credit history may prevent you from getting a loan from the usual financiers. That’s a title loan with a cosigner comes in handy.
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So let’s get down to business!
In a word, a title loan is a type of secured loan where borrowers can use their cars as collateral for financing. That is, your car guarantees the loan repayment such that if you forfeit or fail to pay the loan on time, the lender can repossess the vehicle. A title loan is usually recommended for people with low credit ratings or poor credit history, as the lender doesn’t usually dig into such details.
Even better, you can reduce the burden of repayment and the risk of car repossession by getting the loan along with a cosigner – more details below. And when you apply for the title loan from a reliable company like TFC Title Loans, your request gets approved in minutes, and you get the most money by simply using your car equity.
Overall, car title loans can be absolute life-savers, especially when caught in an emergency. And the fact that they don’t require a credit check makes them even more appealing. Plus, the application process takes 30-45 minutes, and you continue to operate your vehicle.
A cosigner is an individual who agrees to guarantee the debt of the original borrower but does not get any proceeds from the loan. Put otherwise; a cosigner is liable for the debt if the borrower defaults on the loan for one reason or another. Cosigners may also be able to assist individuals who can’t qualify for the car title loan on their own.
As such, a lender may be willing to approve a borrower (they would originally deny) if they cosign with another individual who is somewhat financially stable and can be held liable for the loan. Cosigning a title loan can also bring more favorable terms and funds than the borrower would originally be eligible for.
Think of a cosigner as a family member or friend who has a good credit history and is financially stable. So you need to bank on their good name and credit status to obtain financing from a title loan lender.
In essence, the main point of getting a cosigner is to enable you to get the car title loan hassle-free. As we alluded to earlier, sometimes you may not qualify for a title loan independently, especially if your credit history is so wanting. However, getting the loan with a cosigner makes you eligible for even higher amounts with better repayment plans.
The cosigner will need to sign a credit application document with the terms and conditions of the arrangement. On top of that, they need to provide their identification, proof of income, and proof of residence. The best car title loan provider should keep all confidential information secure and not let the borrower see the cosigner’s data or vice versa.
However, there are some critical factors you must consider before asking someone to cosign on loan. For starters, the cosigner is legally obliged to assume the responsibility of repaying the loan should you, the borrower, default on any repayments. Thus, you should treat the title loan with the seriousness it deserves and pay the loan on time, lest you break the trust bestowed upon you by your cosigner.
Part of preserving the trust is communicating openly with your cosigner to let them know of any difficulties on your end and see if they can help. It’s better to be honest with your cosigner than to play dumb until they receive a shocker that they need to cover for your loan default. Or would you risk ruining your relationships with your close friends and families due to a cosigned loan?
The short answer is, not necessarily. While it’s clear that the cosigner receives no amount out of the loan you’re taking, you may voluntarily decide to include them in your car title as a sign of goodwill. This sends the message that you’re 100 percent committed to paying off the loan without troubling the cosigner.
If you cosign car title, you also give the cosigner the power to repossess your car if you default on your loan, and they become legally obligated to repay. That way, the cosigner can sell your vehicle to recover the money they spent paying the loan, so they don’t incur too much loss.
There are countless car title loan companies in the market, but why should you consider TFC Title Loans instead? Below are the top reasons you should trust us as your go-to title-loans provider: