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

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

In Saskatchewan, leveraging a co-signer for a car loan can significantly strengthen your application, particularly if you have a limited credit history, a lower credit score, or insufficient income to qualify independently. A co-signer legally agrees to be equally and fully responsible for the entire debt, meaning if you, the primary borrower, default on payments, the lender will pursue the co-signer for the full outstanding balance. This shared liability reduces the lender's risk, often leading to loan approval and potentially securing more competitive interest rates, which is especially valuable in the anticipated 2025 Canadian market where lending criteria may remain stringent. For the primary borrower, this matters because it provides access to financing they might otherwise be denied. For the co-signer, it's a profound commitment: their credit score will be directly affected by the loan's payment history, and their own borrowing capacity could be impacted, as the debt appears on their credit report. Under Canadian contract law, the co-signer has no less responsibility than the primary borrower, making it imperative for both parties to fully understand the serious financial implications and trust involved before proceeding.

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