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In MB, what should I know about using a co-signer for car loans?
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Car Loan Glossary • mb

In MB, what should I know about using a co-signer for car loans?

In Manitoba, utilizing a co-signer for a car loan can significantly enhance your application, particularly if you have a limited credit history or a lower credit score. A co-signer with strong credit and stable income effectively shares the financial risk, often leading to improved approval chances and potentially securing a lower interest rate or more favourable loan terms. This matters because better rates can save you thousands over the loan's lifespan, and approval grants access to the vehicle you need.

However, it's crucial for both parties to understand that in Canada, including Manitoba, a co-signer is legally and equally responsible for the entire debt. If the primary borrower defaults on payments, the lender has the right to pursue the co-signer for the full outstanding balance, including any accrued interest and fees. This impacts the co-signer directly, as the loan will appear on their credit report, affecting their own credit utilization and potentially their ability to secure future financing. A default will severely damage the co-signer's credit score. Given potential market conditions in 2025, where lenders might be more cautious, a robust co-signer can be an even more critical factor in securing competitive auto financing.

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