Title Loans with Co-Signer or Co-Borrower

Are you considering becoming a co-signer or co-borrower on someone else’s car title loan? Or are you considering adding a co-signer to your car title loan application? Before doing so, it’s useful to understand the potential consequences. Learn more about how co-signing or co-borrowing can impact both people on a car title loan, so you can make the decision that is best for you.

What Is a Co-Signer?

A co-signer is someone who does pretty much what the term suggests: they, along with the primary person wanting to borrow money, sign for the loan. This means that there are two names on the loan contract. Co-signers may be able to help people who can’t qualify for a car title loan on their own. The lender is able to approve a borrower that might not otherwise qualify if they know that someone else can be held responsible for the loan as a backup. Anyone can be a co-signer, whether that’s a friend or family member – what matters is that the co-signer can improve the primary applicant’s chance to get approved, by adding their own good financial situation or income to the loan application.¹

Title loans serviced by LoanMart are designed to make the process of getting a title loan as convenient and pain-free as possible. Sometimes applicants need co-signers so that they can meet the lender’s loan requirements and get approved.¹

We make it a priority to empower the customers we service to make well-informed decision and are here to answer any of their questions.

Who is a Co-borrower for an Auto Title Loan?

A title loan co-borrower is a person who can help you qualify for a car title loan and is able to assist with making monthly payments for the loan if needed.¹ With their credit and income added to the loan application, they can be in a position to help borrowers who can’t qualify for auto title loans on their own.¹ Using a co-borrower can be a good idea to increase the chance that your title loan application can be approved by the lender.

Co-borrowers could be:

• A relative like an aunt, uncle, cousin or grandparent
• A close friend
• A spouse
• Anyone who supports your financial initiatives
• … and many more!

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Why Have a Co-borrower On a Car Title Loan?

Even though car title loans are usually easier to qualify for than many other credit options, it can sometimes be difficult to qualify for a car title loan! While bad credit doesn’t have to be an option, some applicants have prior credit issues that are so severe that a title loan co-borrower or co-signer can increase the chances to get approved.¹ In addition, some title loan applicants lack sufficient income to afford title loan payments by themselves – especially when looking for a large loan amount.

For those scenarios, it can be useful to add a co-borrower to the title loan application.

Does a Co-signer Need to Be on the Title?

Title lenders have different requirements about vehicle titles and co-signers and co-borrowers. For lenders that operate in multiple states, there can also be differences by state and how the people listed on the title are shown as owners. In many states, if two owners are listed on the vehicle title as joint owners (usually connected by the word “and” on the title), then both owners must sign off on any lender being added as a lienholder to the title. As a result, title lenders may require that the co-owner also co-applies for the title loan, or at minimum, signs off on a formal document called “Title Application”, so that the lender can lawfully add a lien to the vehicle. If the joint owners of the vehicle are both authorized separately to make transactions using the vehicle (usually indicated by the word “or” on the title), then it’s typically sufficient if one of the owners applies for the loan.

Add a Co-Signer to a Title Loan

If a borrower feels they cannot successfully continue making monthly installments without financial support, or if they simply want a safety net, they are encouraged to apply for a title loan with a co-signer. A co-signer is an individual whose name appears on the auto title loan contract. They are equally responsible as the borrower for paying back the loan in a timely fashion. In the event that you fail to make a monthly payment, the co-signer will be held responsible for paying back the loan.

Anyone with reasonably good credit can be a co-signer. As long as they meet the loan eligibility requirements, they may co-sign a title loan with the principal borrower.

What to Consider Before Having Someone Co-Sign a Car Title Loan

Before asking anyone to co-sign on a loan, borrowers should understand exactly what they’re asking the co-signer to do. Co-signers on a car title loan will be legally responsible for paying the money back if the borrower defaults on any payments. In the event that the borrower defaults on the loan, the co-signer will basically be taking the place of the borrower by making the monthly payments or by paying off the loan completely.

For this reason, the borrower needs to take their loan especially seriously if they ask a co-signer to help them secure a car title loan. That co-signer is placing a lot of trust in the borrower to make the payments on time, because the borrower’s financial actions will directly affect the co-signer’s credit as well as their own.

Borrowers should make sure they openly communicate with their co-signer, and do not abuse the trust that co-signer has placed in them. Understand that if anything should happen with the car title loan, the personal relationship between the borrower and co-signer could also be negatively affected. Relationships between family and friends are extremely important so it is vital to comprehend the trust entangled in the action of co-signing a car title loan and what might happen if that trust is broken. This does not mean that a borrower should not utilize a co-signer but rather that they should think carefully about it and make the decision keeping all the aspects in mind.

Alternatives To Relying on a Co-Signer

If asking someone to help make loan payments isn’t an option and you already have a title loan, there are other options you can consider.

• Short term alternatives: If a borrower is faced with a temporary cash crunch and only needs a little more time to get their finances in order, they can ask for temporary payment assistances including due date changes and loan extensions.
• Long term alternatives: If a borrower is going through a tough financial period that is not expected to resolve, they could seek other longer-term assistances including having their loan terms reevaluated on a permanent basis, or seeking a title loan settlement.

It’s important to understand the pros and cons of these alternatives before pursuing them.

Conclusions About Getting a Title Loan With a Co-Borrower

Qualifying for an auto title loan is normally fairly straightforward as long as you have a paid-off vehicle and sufficient income to qualify.¹ Prospective title loan applicants who lack income or who have severely damaged credit may benefit from applying with a co-borrower or co-signer.

In certain states, like Arizona, Texas, Mississippi for example, car title lenders may require that the co-owner listed on the vehicle title also co-signs for the loan, since all owners on the vehicle need to sign off on the car being used as collateral for the loan.

Ready to apply for a title loan with co-signer? With title loans serviced by LoanMart, the process can be easy and convenient, and be completed as fast as same-day!^1,3