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What is the guarantor on a car loan?
I applied for a car loan and they told me I'd need a cosigner or a guarantor to get the loan. I know what a cosigner is, but what's a guarantor?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
The role of a guarantor for a
car loan
is similar to that of a cosigner, but the liability is different.Like a cosigner, a guarantor agrees to pay back the car loan if you default, but only after you’ve been pursued in every legal way first.
The lender also doesn’t check the credit score of the guarantor and doesn’t include them as part of the loan itself. As a result, the guarantor can’t help you get a better interest rate, unlike a cosigner.
If your credit isn’t quite good enough to get the loan on your own, both guarantors and cosigners can provide the security the lender requires to close the deal.
Once you’ve secured the loan, remember that you should also budget for car insurance. Through the
Jerry
app, you can compare rates from different carriers to find the best full coverage auto insurance
for your budget.View full answer
- Gregory R.
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