Car Loan with Co-borrower

Have you recently applied for a car loan, but were declined? Most car loans are declined because an applicant’s credit score is too low or because they do not have enough income to meet the minimum requirements for the loan. Do you have fall into either of these two categories?

Other reasons an applicant may be declined for an auto loan can include short job time, short residence history, or having two many open auto loans. The good news is all of these issues can be overcome by simply adding a co-borrower to your auto loan application. To be clear, adding a co-applicant doesn’t mean you will automatically be approved. However, it does mean you will increase your chances of getting the auto loan you want.

Why does a co-signer make such a difference? Every auto lender has requirements that must be met in order for a customer to be approved. In some cases this may mean you have to be on your current job for at least 12 months or have a minimum FICO (credit score) of at least 520. It’s different for each lender, but failing to meet these minimum requirements can result in a decline. Adding a co-borrower can help strengthen an application if the additional applicant meets these minimum requirements.

What is a co-borrower? A co-borrower is usually a spouse or significant other that lives at the same residence. Some auto lenders will allow co-applicants that live at other residences. An example would be a father who has a son in college. The son in college lives on campus, but the father would like to co-sign for the son on an auto loan.

What is the responsibility of a co-applicant? The term co-borrower or co-signer means that the applicant has the same responsibilities as the primary applicant. This means that if your spouse, father, mother, or brother co-signs their name to an application and you are both approved for financing, you will both be equally responsible for the repayment of the auto loan.

What is a straw purchase? This is a term used for purchases made with a co-applicant who has no relation to the borrower. This could include a fraudulent application or a purchase made with a co-borrower who has no intention of repaying the car loan. Although these loans do slip through the cracks from time to time, they are frowned upon and can result in serious consequences if the applicants are caught.

If you’re looking for a new or used car loan, apply online today at If you’re concerned about your income, credit, or employment history you should consider adding a co-borrower to your auto loan application to improve your chances of getting the approval you need to buy the car you want.

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