Co-Signers and Car Title Loans – What You Need to Know

What Is a Co-signer for a Car Title Loan?

Since title loans are secured by collateral, the application process is typically flexible, so a perfect credit score isn’t required to get approved for funding. However, applicants with bad credit or very little credit history may consider applying with co-signers to increase their chances of receiving approval. If you’re in a similar situation, it’s important to understand how co-signers and car title loans can work together before you submit an application.

A co-signer on a title loan is a person who signs the loan contract with you if you can’t qualify for funding on your own. The co-signer is typically a trusted friend or family member who has evidence of stable income and a good credit history, which reduces the borrowing risk you may have as an individual. If you’re eligible for an auto title loan but can’t keep up with your payments, the co-signer is responsible for handling the installments on your behalf.

To put it simply, a co-signer serves as a backup if you have problems with your loan payments. Co-signers don’t have a claim on the vehicle you use to secure a title loan like a co-borrower does and are only active in the title loan process if you can’t repay your loan in full. If you need help qualifying for a loan, a co-signer can be a valuable option to consider when there aren’t any other options. However, there are some risks associated with applying with a co-signer that you should be aware of before you take out a loan.

Continue reading to learn more about co-signers and car title loans, and if you have any general questions about getting an auto title loan, call a ChoiceCash title loan agent at 855-422-7402 or visit the FAQ page for more information.

Who Qualifies as a Co-signer for a Car Title Loan?

You can ask anyone to co-sign on a title loan, but typically, a co-signer is a friend, family member, or even a neighbor. A sister, brother, parent, or friend may agree to help you with your loan application so that you can access financial relief. But, before you ask someone to be your co-signer, keep in mind that it is a significant financial liability. Therefore, co-signing a loan application is not a decision that should be made lightly.

Is a Co-signer the Same as a Co-borrower?

While co-signers and co-borrowers are equally accountable for the debt they agreed to sign for, a co-signer doesn’t have access to the loan proceeds like a co-borrower would. For title loans, if there is an “and” between someone’s name and your own on the car title, in most states, you must apply for a title loan and sign the loan agreement together. In this situation, the individual applying for the loan with you is a co-borrower, not a co-signer.

What Are the Benefits of Having a Co-signer for an Auto Title Loan?

Having someone co-sign on a car title loan with you may have its fair share of benefits. If you think you need help getting auto title loan approval, you could encounter the following perks when you apply for an online title loan with a co-signer:¹

• Higher Chances of Approval: Getting approved for a car title loan can be challenging if you don’t have an established credit history or proof of a steady source of income. While auto title loans are known for their flexible credit requirements, an applicant’s credit history is still an important part of the application process because it helps lenders determine their ability to make a loan payment. Depending on the lender you work with, you may have difficulty qualifying for a loan if you don’t have a solid credit history or if you have very poor credit. Fortunately, applying with a co-signer who has good credit and a stable financial history may increase your chances of approval since the co-signer adds their income alongside yours.
• Lower Interest Rates: Finding title loans with bad credit is possible, but some lenders may charge higher interest rates because of the significant credit risk you pose as a borrower. However, applying with a co-signer who has better credit can reduce that risk to lenders, so you can potentially get lower interest rates due to the added financial security provided by the co-signer’s creditworthiness.
• Potential for More Funding: Combining two incomes on an application can potentially give you a more significant loan amount than you would be able to access independently. If you want a large amount of cash to cover an unexpected expense, consider applying with a co-signer to improve your chances of getting the total amount you need for your financial situation.¹
• Opportunity to Build Credit: By having a co-signer on your car title loan, not only can you improve the likelihood of qualifying for a loan, but if you are approved, you may have the opportunity to build your credit history if you’re on time with your monthly payments! This is possible if your lender or loan servicer reports your payment behavior to Experian or another major credit bureau. Having a solid credit history is helpful when you decide to apply for another loan or a credit card in the future.

What Are Some Risks to Consider Before Adding a Co-signer to a Title Loan Application?

Before you ask a friend or family member to co-sign a title loan with you, it’s essential to acknowledge the financial implications and personal issues that may come with that decision. Although there can be plenty of advantages to co-signers and car title loans, you must consider the potential risks.

Take a look at some of the potential drawbacks of having a co-signer on your title loan agreement:

• Impact on the Co-Signer’s Credit Score: Defaulting on an auto title loan can lead to vehicle repossession. Additionally, title loan default can negatively affect your credit score and the co-signer’s credit score if your title lender or servicer reports the payment behavior to one or more of the three major credit bureaus. Since the co-signer is financially liable for the loan, they can help you with your payments if you are unable to meet your obligations. But, communication is incredibly important in this scenario. If you are struggling to make the monthly payment, make sure to reach out to the co-signer and your lender or loan servicer as soon as possible.
• Strained Relationships: Failure to keep up with your title loan payments can also cause tension in your relationship with the co-signer if they have to handle your debt obligation. Whether it’s a friend or a relative, the idea that they’ll have to make payments and worry about the consequences of a loan default may lead to resentment down the line.

Adding a co-signer on an online title loan is a huge financial decision. If you think having a co-signer is the right option, it’s best to find someone you fully trust. Make sure you openly communicate with the person about getting a title loan and express the potential risks of a title loan default. If everyone agrees to the terms of the loan, you can start the application process for an auto title loan online from the comfort of your home!

How to Add a Co-signer to Your Title Loan

Are you interested in applying for a car title loan with a co-signer? The title loan application process with a cosigner works almost the same as applying for a title loan independently. The main difference is that the co-signer must also provide documentation to verify their information and provide proof of their ability to make a payment to a title loan lender.

When applying for a ChoiceCash title loan serviced by LoanMart, you can expect a smooth and convenient application process! Whether you apply with a co-signer or not, the application process can be very straightforward for applicants who need emergency cash in as little as 24 hours.¹

Here’s a brief overview of the three steps you must follow to apply for an online title loan with a co-signer:

1. Apply Online or Over the Phone: Sometimes, an applicant must drive to a physical location to apply for an auto title loan. Fortunately, through ChoiceCash title loans, you can begin the application process with your co-signer without leaving your home! You can apply online by filling out a short questionnaire or get started over the phone by calling a ChoiceCash title loan officer at 855-422-7402.
2. Submit a Few Documents: The next step of the application process is to provide some paperwork to verify your application information. While the exact documents can vary by state, you can expect to need a vehicle title in your name, proof of income, a valid, government-issued photo ID, pictures of your car, and evidence of your current address. When applying with a co-signer, they must also submit proof of income, residence, and identity.
3. Receive Your Title Loan Funding: Once you and your co-signer submit the necessary paperwork, the last step is for both of you to sign the loan contract if you are fully approved for funding. Qualified applicants generally choose to get their money through direct deposit. But, you can also add your funds to a debit card or pick up your cash at any participating money transfer location nearby.

If you’re eligible for a ChoiceCash title loan serviced by LoanMart, you can get your money in as little as 24 hours. However, some qualified applicants can access their title loan cash the same day they apply!¹ Submit the online form or dial 855-422-7402 to begin the application process for a ChoiceCash title loan today!

Why Choose Choicecash Title Loans for Emergency Cash?

People struggling with medical bills or other personal expenses can use an online title loan to get back on their feet. Take a look at a few additional reasons why applicants choose ChoiceCash title loans for financial relief:¹

Flexible Repayment Options

Just as everyone has different financial needs, everyone has different preferences for making payments on their loans. If you’re eligible for a ChoiceCash title loan serviced by LoanMart, you can set up automatic payments from your checking account, pay through the online portal, or visit a participating money transfer location to pay in person.

Complete a Car Inspection Online

A vehicle inspection is required during a title loan application to verify the car’s current value and overall condition. Through ChoiceCash title loans serviced by LoanMart, you can complete a vehicle inspection online during your application! Use your smartphone to take clear pictures of every side of your car, the odometer reading, and the Vehicle Identification Number (VIN). Once the pictures are ready, you can conveniently text them directly to a title loan representative!

No Prepayment Penalties

Borrowers who completely pay off their loans before the end of their loan term can be financially penalized by some lenders, and that is called a prepayment penalty. The good news is that you can pay off your ChoiceCash title loan as early as possible without worrying about prepayment penalties or balloon payments.

Take advantage of a flexible title loan option by applying for a ChoiceCash title loan serviced by LoanMart! Submit a short prequalification form online to start your application, or call 855-422-7402 if you have any title loan-related questions, such as “What happens if my car is totaled and I have a title loan?”