Buying a car is always considered a milestone in an individual’s life and is nothing short of a huge deal. However, such a purchase comes with obligations of its own. With numerous considerations given to your credentials and financial credit scores, seeking a car loan is a lengthy procedure with detailed steps and can be affected severely if your credit score falls short. A low credit score can stand as a major drawback and hinder the procedure of acquiring a loan, on either a new or used car. But this barrier can be overcome with some assistance from a co-signer.
Co-signing for car loans can be a smart move, all you need is a partner with a reliable credit score. While compensating for your own low score, they help ensure credibility on your part, understanding and affirming the shared responsibility on your car loan. It is essential for the co-signer to understand that they would share equal accountability as the primary borrower, and is eligible to sign a contract dictating all the terms and conditions of the loan.
The co-signer is held responsible to warrant that payments be made on time. Documents they sign, guarantee that all the payments would be made by the primary borrower, and in case they fail to do so on time, the payments would be deducted from the co-signer. Hence, it is essential for the co-signer to bring along their documentations of employment, which will help assure the lender of his ability to repay instalments. Substantial income proof is can also establish the assurance of a good credit score on the co-signers part.
Often income tax documents, proof of residence and bank statements are used as proof to vouch for stability and credibility. A steady flow of income assures guaranteed returns on payments when the credit scores for the borrower don’t qualify. Investors appreciate knowing that their money is going into safe hands, and it is in their best interest to know fully well that they are doing so.
Securing car loans in India is a difficult task, given the number formalities associated with it, but it is essential to go through the process thoroughly from both ends, and be weary of scams and frauds that aren’t so rare. Investors would readily invest, when the presenting documentation is authentic and put up from without any qualms. It also becomes easier for the borrower to secure the loan under these conditions.
While a low score may stand as a major hindrance, the possibility of co-signing helps individual apply for loans easily. All you must do is ensure that your guarantor is well-aware of the extent of the responsibilities they’re taking over, and the risk that comes along with it. They cannot run away from their share of the obligation that comes with being a co-signer, and must step up if the former fails to fulfil their own. Once you have all the basics out of the way, you are ready to go make your big buy!