If your credit history is insufficient, or you don't have the income to be approved on your own, a co-signer can assist you by guaranteeing the terms of a lease, mortgage, student loan or car loan will be met. Whether your co-signer is required to have a full-time job depends on the financial institution and/or how much you're borrowing.
Credit History
The most important consideration in being approved for a loan is credit history. If your credit score is low and you need a co-signer, the financial institution handling the loan will look at your co-signer's credit history and score. Every financial institution has specific requirements regarding what it considers a sufficiently high credit score. Credit scores are weighed heavily, as they are indicators of an individual's financial responsibility. An individual with a high credit score is deemed low-risk, meaning financial institutions trust people with high credit scores to take responsibility for financial obligations, including making payments on time.
Income
A co-signer's income is considered, as well as his debt-to-income ratio. If a co-signer works part time, a lender might deem that sufficient depending on how much the co-signer makes. As with credit scores, every lender has different requirements regarding minimum income thresholds. Generally, if a co-signer meets the lender's income requirements through part-time work, and the co-signer has a good credit score, it's likely the lender will approve the co-signer's guarantee to pay the loan in the event the primary borrower defaults.
Age
Lenders also look to the age of the co-signer. If the co-signer is not nearing retirement age, meaning he will likely be working for years to come, lenders are more apt to approve him. If a co-signer is retired, a lender will consider the co-signer's age and assets. Sometimes, lenders will not approve a co-signer who is retired, even if he has a good credit score.
Additional Considerations
Each lending institution has different things it looks for in a co-signer. Having a full-time job might not be a requirement, particularly if a co-signer meets the minimum income requirements through part-time work. Generally, if a co-signer has stable income and a track record of paying bills on time, a lender will assume the co-signer can, and will, keep his promise of assuming financial responsibility if the primary borrower cannot.
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