Should I be a Co- Signer or Co-Byer on an Auto Loan?

There are a  few things  to consider before you sign  for an Auto Loan.

If someone asks you to be a sign on a loan, you should  consider the borrower's character and ability to make the payments, and whether you could afford the debt if the borrower defaults.

 Remember .... If the loan goes bad, you have to pay it back. You  need to look at this as if  you were taking out the loan Yourself.



How a co-signer and co-buyer are the same:


1. Both are co-applicants and are also responsible for the loan. If the primary borrower is unable to meet the loan obligations, than the co-signer or co-borrower must make payments on the loan.



2. Both the co-signer and co-borrower are signatories on the loan. This means that in addition to the primary borrower, the co-signer and co-borrower both appear on the loan and sign the loan agreement documents.



3. If the  loan goes into default, both a co-borrower and co-signer can be subject to collection actionwhich can  include garnishment.



The difference:



Co-signer:

A co-signer is someone who signs your loan with you and is like insurance to the company you are dealing with. If for any reason, you fail to make a payment, the cosigner is responsible for taking care of it. This is why not many people will cosign for anything.




Co-buyer:


Co-buyers can split the overall cost of buying including deposit, payments, tax, and insurance. This allows you to multiply your income and afford a vehicle that you may not be able to afford alone