MAZDA Financing 101: What is a Cosigner?

Ready for a new vehicle from Medlin Mazda but uncertain about your Mazda financing options? Financing a new vehicle can be overwhelming. Adding a cosigner may be just what you need.

What is a Cosigner?

A cosigner is essentially a back-up on your auto loan. This is a person, typically a close friend or family member, that agrees to take over your auto loan if you cease making payments. This can be a beneficial option if you have bad credit or no credit at all. Lenders take into consideration your cosigner’s credit score when determining your loan eligibility.

Do I Have Other Options?

There are still options available if you don’t have a cosigner for your auto loan. Keep in mind, financing a vehicle with bad credit can result in a higher interest rate, which means a larger auto payment. If that is an issue, you may want to consider a more affordable vehicle or even a pre-owned Mazda car or SUV. Or, if possible, try making a larger down payment to reduce the amount you need to finance.

Should I Be a Cosigner?

While adding a cosigner to your loan is certainly a perk, that isn’t necessarily the case if you are asked to be the cosigner. There are certainly risks involved. You are essentially agreeing to pay their auto loan if they quit making payments. Their missed payments can hurt your credit score. It also increases your existing debt, which can make it difficult for you if you need to borrow money in the future.

Want to review your Mazda financing options? We encourage you to reach out to the financial experts at our Mazda dealership in Wilson, NC. We’re happy to help find the best solution for you!