There is a concerning rise in co-signers on auto loans in the US ; a recent survey revealed that of the over half co-signers, 2,000 helped someone obtain a car loan, more than twice as many as had helped with a personal loan, according to CreditCards.com . The fear is that, as we recently noted, auto loans topped $ 1tn for the first time for Q1 2016 with increases in both the share of subprime borrowers and loans that are 30-60 days delinquent; co-signing could put someone on the hook for the entire amount outstanding if the primary borrower cannot, or won't, pay up. "Most of these people are trying to get their spouse or friend get a leg up financially," said Matt Schulz, senior analyst for CreditCards.com. In fact, CreditCards.com has warned that in some US states creditors can even try and extract the money owing from the co-signer first . Of the co-signers in the CreditCards.com survey, 28% ended up having to pay for at least part of the bill, while nearly 40% of them saw a drop in their credit score due to the primary borrower's bad credit habits.
There is a concerning rise in co-signers on auto loans in the US ; a recent survey revealed that of the over half co-signers, 2,000 helped someone obtain a car loan, more than twice as many as had helped with a personal loan, according to CreditCards.com . The fear is that, as we recently noted, auto loans topped $ 1tn for the first time for Q1 2016 with increases in both the share of subprime borrowers and loans that are 30-60 days delinquent; co-signing could put someone on the hook for the entire amount outstanding if the primary borrower cannot, or won't, pay up. In fact, CreditCards.com has warned that in some US states creditors can even try and extract the money owing from the co-signer first . Of the co-signers in the CreditCards.com survey, 28% ended up having to pay for at least part of the bill, while nearly 40% of them saw a drop in their credit score due to the primary borrower's bad credit habits.