How to Get People to Cosign a Loan for You
If a financial institution feels your loan application is not strong enough in terms of income and credit, they may request a cosigner. To get someone to cosign for you, it's important to gain their trust and reassure them that you will be able to make your monthly payments. A prospective cosigner must be convinced that you have the resources and ability to handle any potential problems that may occur pertaining to the loan.
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Instructions
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Choose several potential candidates. After you choose your candidates, try to determine who is most likely to cosign for you. The person you choose could be a friend, relative or even a co-worker. Evaluate all of the candidates to see which has the strongest attributes such as job, character and credit history. You may not know all of this information, such as their credit history, but if you approach them about cosigning, they will probably give you a little insight into their credit situation if they are unable to cosign.
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List all the reasons you why they should cosign. You have to build a strong case for yourself. If a bank or lending institution would not approve you for a loan, your potential candidate may be having some reservations about cosigning. Point out the fact that even though you don't have much credit, you have managed to pay your debts on time. Let your potential candidate know that you are responsible, hard working and dedicated to your job. You also have to let them know you never miss work. If you have an emergency fund saved up that you can fall back on, this may help to calm their fears about cosigning. The more money you have saved, the stronger your case. If you have a retirement account such as a 401k, let your potential cosigner know about that as well. In an emergency situation you can always take out a loan on your 401k, even though you will have to pay taxes and penalties if the money is taken out early.
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Explain that you have a surplus in your budget. Even if you take on a loan, you should have money left over for living expenses. Explain to your cosigner that taking on this extra payment will not strain your budget. Making payments will not be a problem. You may want to let your cosigner know that your credit, as well as theirs, is important to you. If your cosigner is accepted, the loan will show up on their credit history as well as yours. You should also tell your cosigner that you will keep the lines of communication open. In the unlikely event that something happens such as a missed payment, you will keep them in the loop. After you have presented your case the last step is to ask them to cosign for you.
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Tips & Warnings
You may want to assure your potential cosigner that you will try to refinance the balance on your own after a certain period of time.
To get someone to be a cosigner, you must demonstrate that you have track record of character, integrity and values.
