What Are the Cosigner Requirements?

If you’re planning on taking out a bad credit auto loan and want to add a cosigner, what are the requirements? Cosigner requirements are fairly simple: they need to have good credit and a qualifying income. Being a cosigner means adding themselves to a car loan and agreeing to share the responsibility of making sure it gets paid. Cosigners don’t have any ownership rights to the vehicle, but they are responsible in the event you can no longer make payments.

Cosigner Requirements for Bad Credit Auto Loans

Because your credit isn’t stellar, you’re more than likely going to be working with a subprime lender. These lenders can handle various unique credit situations, including bad credit and no credit. Subprime lenders work through special finance dealerships, and have specific requirements that you and your cosigner must meet in order to get approved.

Specifics vary by lender, but your cosigner generally must meet these two requirements:

  • What Are the Cosigner Requirements?Have good credit – Cosigners need to attach their good credit to the loan to help you get approved. In order for someone to be a cosigner, they usually must have a FICO credit score of 700 or higher. The lender checks their credit to make sure they have a qualifying credit score.
  • Have a qualifying incomeYour cosigner must qualify for the auto loan on their own, and this means having a certain level of minimum income and enough available income to support a car payment. Typically, subprime lenders ask that cosigners have a minimum monthly income of $1,500 to $2,000 a month before taxes from one job. They also check to see that they have a qualifying debt to income (DTI) ratio of no more than 45% to 50% of their monthly income.

How Can I Add or Remove a Cosigner?

If you’re in the middle of a bad credit auto loan, is it possible to add or remove a cosigner? It sure is! The only way you can add or remove a cosigner is by refinancing the loan.

In order to qualify to refinance a bad credit car loan, your credit score needs to have improved since taking out the original loan. This generally means at least a year needs to have passed to give you time to make a difference.

If you want to add a cosigner, make sure they meet the requirements listed above. If you want to remove a cosigner, make sure you're able to qualify for the loan on your own.

The Bottom Line

Adding a cosigner to a bad credit car loan can be a great way to boost your approval odds. Make sure you ask your potential cosigner if they’re willing to put their credit and finances on the line for you, and that you have a game plan with them in the event you can’t make payments. Always remember that your actions with the auto loan directly affect your cosigner.

If you have a cosigner on hand but don’t have a dealership to work with, we can assist. The Car Connection wants to match you to a dealer near you that knows how to help people in all kinds of unique credit situations. Thanks to our nationwide network of partner dealerships, we can save you the hassle of searching for a dealer on your own.

Don't wait any longer if you need a vehicle. Get the process started today by filling out our fast, free, and no-obligation car loan request form!


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