Cosigner- Complete Guide to Know Everything About
A cosigner is a person who jointly applies for the loan along with you and promises to pay the debt in case you are not able to pay.
Availability of cosigner makes you a preferred borrower from the viewpoint of banks.
A Cosigner will come to your rescue in the following circumstances:
- You have a very bad credit history. Repayment of earlier loans taken by you was irregular due to your situation at that time.
These days review of anything is available online. You can check the review of even a small consumer good or a latest innovative product like a review on BTC Profit on the internet. In a similar manner, banks and financial institutions have access to check the past repayment history of the loan applicant. Even if you have good income and want to avail a new loan the banker will deny the loan since your credit history is not good. In such a scenario, you can take the help of a cosigner who has good credit rating can help you in getting the loan easily.
- Income: You need a larger amount of loan urgently. You can repay the same surely based on the realization of funds which are now locked up indefinitely. But your current income is low. Bankers look at your income level to ascertain the loan amount. Hence when your income is low, availability of a cosigner with high income can easily get a large loan amount for you.
- Asset: Your income may be reasonable. If your work in an industry which is risky and volatile, the banker will expect additional security for the loan in the form of an asset. But you may not have a house or a few shares which could be offered as security for the loan. In that case, a cosigner can help in getting the loan easily.
The cosigner will pay the loan in future in case the primary borrower is not able to pay. You can reach out to your friends and relatives for acting as a cosigner. In case you cannot find anyone, you can do the following things:
- Wait till your credit rating improves and apply for a loan at a later period in the future.
- Reduce the loan amount so that you fall in eligibility criteria without a cosigner.
It is always prudent to approach a person to act as cosigner by providing full and clear details of your loan requirement.