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

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

In New Brunswick, utilizing a co-signer for a car loan can significantly enhance your application's strength, particularly if you have a limited credit history, a lower credit score, or insufficient income. A strong co-signer adds their established creditworthiness to your application, making you a less risky borrower in the eyes of lenders. This can be crucial for securing approval for loans you might otherwise be denied, and often results in more favourable interest rates and terms, a significant advantage in the current (2025) market where higher interest rates make lenders more cautious.

However, it is paramount to understand that the co-signer is equally and fully responsible for the entire debt. Should you, the primary borrower, default on any payments, the lender has the legal right to pursue the co-signer for the full outstanding balance, and their credit score will be negatively impacted. Why this matters: This arrangement is a serious legal commitment for both parties. While it can be an invaluable tool for accessing necessary financing and building your own credit, it demands clear communication and a complete understanding of the shared financial and legal obligations to protect both your financial future and your co-signer's.

References:

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