Cosigning a Lexus financing plan is a big responsibility, but our team is here to help. If you’re helping a friend sign their financing plan, you should understand the requirements, your obligations, and the longer-term implications. Keyes Lexus outlines what you should know before you cosign.
Cosigner Responsibilities
First, you should know what exactly your responsibilities are as a cosigner. When you cosign a financing plan, you’ll be expected to make payments if the primary borrower misses a payment or stops making them altogether. If they skip payments or default, your credit will be impacted the same as theirs.
Financing Terms
Since you will be expected to pay the loan if the chief signer cannot make payments, it is essential to understand the financing terms. We’ll review the loan information with you so you know what you’re expected to pay if a payment is transferred to you.
Credit Score
We’ll need to check your credit report when you cosign. This tells us that you have a good history of repayments in case you need to take over payments. It’s best to check your credit report before you cosign so you can correct any errors with a credit bureau.
Financial Information
In addition to your credit score, we’ll also verify your take-home income to ensure that you can make payments should the need arise. This requires information on both your income and other debts you’re currently paying off.
Longer-Term Impacts
Remember that even though the loan or lease technically isn’t yours, it still counts as part of your debt utilization; this can impact your ability to get a loan while the one you’ve cosigned is in force. Conversely, depending on the lender and loan terms, you may effectively be released from your obligations after a specific period of on-time loan or lease payments; make sure you understand the terms and implications.
Learn More About Lexus Financing in Van Nuys, CA
Have any other questions about Lexus financing and cosigning a plan? The Keyes Lexus is standing by to answer. Contact us today to learn more about financing and the responsibilities of a cosigner.
