Cosigner vs. Joint Loans for Cars

Cosigner vs. Joint Loans for Cars

Purchasing a vehicle for your family or business usually requires a loan. Sometimes, if you are a single borrower, you may need a better credit score or loan-to-debt ratio to qualify for a favorable rate. Choosing a cosigner or joint auto loan can grant you access to a larger loan with a lower interest rate. While cosigner and joint loans are similar, they have several key variations that make them ideal in different situations.

What Is a Joint Auto Loan?

A joint auto loan is an option that allows two people to borrow money for a vehicle and share the benefits and risks. Both borrowers list their names under the loan, meaning they can both access the funds.

The borrowers are also responsible for payments during the auto loan’s term. They can form a private payment agreement as long as the lender receives full payment on time each month. Joint borrowers share proceeds upon the vehicle’s sale.

Whose Credit Score Is Used on a Joint Auto Loan?

Lenders consider both borrowers’ credit scores when considering joint auto loan applications. The borrowers must qualify for the lender to approve the loan. Payments, or the lack of payment, affect the borrowers’ credit scores.

What Is a Cosigner Auto Loan?

A cosigner auto loan is a lending agreement that supplies funding to a primary borrower with a cosigner’s support. Using a cosigner on an auto loan allows the primary borrower to qualify for a loan or receive a lower interest rate.

The primary borrower assumes ownership of the vehicle and is the first person responsible for monthly payments. The cosigner is accountable for the balance if the primary borrower defaults. However, the primary borrower takes full ownership of the vehicle and receives all proceeds if they sell it.

Whose Credit Is Used for a Cosigner Auto Loan?

Lenders approve cosigner auto loans according to the cosigner’s credit. The primary borrower’s credit and income play a role in the final decision, but the cosigner’s standing bears the most weight.

Learn More About Car Loans With RefiJet

Joint and cosigner auto loans are actionable resources for groups that want to share financial responsibility for a vehicle loan. However, there may come a time when you want to refinance your loan under a single name or add a name to your personal loan. RefiJet simplifies the process of refinancing auto loans. We invite you to find out if you are eligible for auto loan refinancing today!

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Some communications with and disclosures by Yield Solutions Group, LLC dba RefiJet.com (“RefiJet.com” or “us” or “we”) on its behalf and on behalf of participating banks, finance companies, and credit unions (hereinafter called “Lenders”) are conducted electronically. In order to access, receive and retain required notices and your documents, including, any notices and disclosures required by state or federal law, such as our Privacy Noticeloan documents and disclosures that we provide to you on behalf of any Lenderand any other transaction notices and information from us (collectively, “Documents”) electronically, you must satisfy the minimum system requirements outlined below. However, if you wish to obtain a paper copy of any Documents that RefiJet provides you in connection with your credit inquiry and any subsequent application to our Lenders, you may contact Yield Solutions Group, LLC (dba RefiJet.com) in writing at 5775 DTC Blvd Suite 400, Greenwood Village, CO 80111 or by email at Info@RefiJet.com. We currently do not charge a fee to send you a paper copy of any electronic Document, but reserve our ability to do so. Be sure to state which of the Documents you are requesting.  

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It is important that you keep your email address current with us.  Please notify us at 1.800.260.5355 if your contact information changes at any point in the refinance process.  We may treat your failure to provide us with a valid email address, or the malfunction of the email address we have for you, as a withdrawal of your consent to receive Documents electronically. 

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