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If you’re looking to buy a car, most likely you would need to take out a loan to pay for it. Sometimes, however, this is easier said than done, which is why it could make sense to use a cosigner. Our Honda financing department can over what this entails.

What is a Cosigner?

A cosigner is basically someone who applies for a loan with you. Both your name and the name of your cosigner will be on the loan.

Why Do I Need a Cosigner?

You may not actually need one. Credit plays a big role when it comes to borrowing money. If you have a good credit score, getting a loan may be no problem.

But, if your score is low, it could be more difficult. Using a cosigner with a good score could improve your chances.

Benefits of Using a Cosigner

Clearly the biggest benefit of having someone co-sign on the loan is to get the loan in the first place. But there’s another advantage: it could give you a much better interest rate. This could end up cutting your costs significantly.

Plus, as long as you make your payments on time, this should raise your credit score. Eventually, you may be able to refinance the loan for an even lower interest rate. 

A Key Thing to Remember About Cosigning

You can’t forget that because your cosigner’s name is on the loan, he or she will be held responsible if you run into financial difficulty. In addition to being on the hook for any remaining payments, your transgressions could hurt their credit.

If you have questions about financing, contact Tom Wood Honda near Fishers. You can also start the process now by filling out our online application.

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