How You Can Avail A Used Car Loan With A Co-Applicant
We all have aspirations of owning a car in our lives and raise the standard of living. One way to go about is by buying a second-hand car to get the best car at the best price. However, with the financial instability induced by the COVID-19 Pandemic, not everyone can afford to buy a second-hand car because saving money to deal with the financial crisis is more critical.
Nonetheless, that doesn’t mean you should not pursue your dream of owning a car. You can apply for a used car loan and buy your favourite used car. You can conveniently get an affordable used car loan interest rate. The best part is that you can ascertain a monthly EMI for yourself by using the online used car EMI calculator of your lender.
It is also possible to use a used car with a co-applicant to reduce the used car loan interest rate and improve your credit score. There are specific eligibility criteria that a co-applicant needs to meet to get a used car loan approved.
We have prepared a list of eligibility criteria to help you understand who can be a party to your used car loan.
Although not every lender looks into your and the co-applicants relationship before approving your loan, many banks and non-banking financial companies instantly approve the used car loan application if the co-applicant is closely related to you. Know that the co-applicant must share a blood relation with you if you want to get a used car loan.
- Good credits score
Your blood relationship who wants to be part of your loan application should have a decent credit history. For instance, the co-applicant should have paid all previous payments like EMIs and credit card bills on time. Lenders usually approve co-applicants with a credit score above 750. So, make sure that your co-applicant has maintained an excellent CIBIL credit score before asking him/her to be your co-signer.
- Regular Income
The co-applicant must show a stable source of income to the bank or non-banking financial company. The co-applicant is required to submit proof of income to the lender in the form of bank statements, paychecks, or any other related documentation.
- Proof of residence
Although the co-applicant must get approved, some lenders ask for permanent residence proof and a consistent income flow.
The points mentioned above are some of the eligibility criteria that a co-applicant must meet. You must also remember that a co-applicant is equally part of the loan applicant. If the primary borrower fails to make payments, the co-applicant is liable to make payments.
Benefits of a used car loan co-applicant
Getting a co-applicant to get a second hand car loan is the best option to avail of if you are short of cash. There are certain benefits associated with having a co-applicant.
The used car loan interest rate gets lesser when you have a co-applicant. The chances of loan repayment increase and make the lenders confident.
It certainly improves your CIBIL credit score by making the payments on time.
Having a co-applicant can get your loan approved almost instantly. However, it would be wise to conduct thorough background research on other financial institutions and choose a lender that offers the best auto loan and has customer-centric services.