Money is needed by everybody in life. During these times of economic recession, it is obvious for a person to face a cash crunch in life at one point of time and the personal loan becomes the only option for you during the times of emergency. Though getting an unsecured loan is a simple process, it is not easy to get the loan when you have the issues of bad credit. How should you handle this? The best way to pave an easy process to get the quick loan with the bad credit is to take the help of the co-signer with the good credit score.
Improve Chances of Getting Personal Loan with Co- Signer
Things to look in
You can add co- singer to the personal loan application when you want to improve the chances of getting the personal loan approved. The co- singer will be the part of personal loan application process but will be liable to repay the loan if you default it. In this case, the person will just stand as co- signer of the personal loan agreement but not as co- borrower.
Check for income and credit score
Any lender will ask you to get a co- signer for the personal loan application when you are not able to qualify for the personal loan on your own. You should get in a co- signer who has a strong credit score and a good income to improve the chances of the loan approval.
How will you benefit?
Co-signer when you have bad credit
There are no chances of your cash loan getting approved from the lender when you have poor credit score. Even if the lender approves the loan, they are going to compensate the high risk by offering the cash loan at a high rate of interest. Some lenders do insist on having a co-signer to approve the loan to stay assured about the repayment of the loan but, not to offer the loan at reduced interest rates. It is important that you discuss these terms with the lender before availing the unsecured loan with the help of the co- signer.
Co- signer when you have low income
Income is the second most important thing that the lenders will look at while issuing the unsecured loan to a borrower. There will fewer chances of approval even when the debt income ratio of the person is high. As you will have less income left towards the repayment of the loan after addressing all your expenses, the lender is little reluctant to approve the loan for you. Having a co-singer will good income will get your loan approved under an assumption that they will take the responsibility of making payments. The assets of co-signer will also impact your loan application. A co-singer having assets will be a greater advantage here because they will be available for liquidation if the loan defaults.