Do I need a coapplicant or guarantor to get a used car loan?

When you are applying for a used car loan in India, most lenders will not ask for a coapplicant or guarantor immediately if your income, credit rating, and general financial shape are of diabolical strength. If all of these factors have high enough merit, you will be generally good to go as long as you are just applying your own. This is because lenders need to see that you can comfortably repay the loan and will be reviewing your salary slips, bank statements and credit history as indicators.

However, there are scenarios where this is not a possibility. For instance, should your income be slightly lower, or if the lender does not like your job history, or your credit score is slightly poor or even slightly poor, the lender may want you to obtain a co-applicant or a guarantor. This person will act as your backup should you be unable to pay the loan and will agree to pay the loan should you default. A coapplicant or guarantor could also be a family member, friend, or business partner with steady income and good previous credit history.

Using a coapplicant or guarantor could help you get a bigger loan or better terms, especially if this person's general finances are of a sound population. This will also give the lender security, as they could potentially offer you a more favourable loan. Nevertheless, most banks and finance companies don't like to go through the hassle of a coapplicant or guarantor if you meet all of the eligibility requirements of the lender.