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Can My Spouse Be My Cosigner?

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There’s nothing specifically that says your spouse can’t be your cosigner, but in most auto loan situations, lenders are more likely to recommend a joint auto loan between spouses. Though they sound very similar, a joint auto loan with a co-borrower and an auto loan with a cosigner is very different.

Auto Loans With Your Spouse

When you apply for a car loan with another person you first have to decide if you both plan on owning the vehicle. If you do, it’s a joint auto loan, where your spouse is likely to become your co-borrower, not your cosigner.

Co-borrowers have equal rights to property they hold jointly, such as a house or a car. You’re both responsible for making payments, both have your names listed on the car title, and both need to be present if you plan on selling the car.

In some cases, you may need the help of your spouse to get a vehicle; spouses often apply for loans together to get larger loan amounts and equal rights to the asset. And, in some states, even if you don’t intend to make your property shared, the state sees any property purchased while you’re married as community property – regardless of whose name is on the title.

When your spouse is only the backup payer and doesn’t have their name on the car title, they’re a cosigner. This doesn’t typically happen since many lenders automatically view your income as one if you’re applying with your spouse, which is why it’s much more common to have your spouse as your co-borrower than your cosigner.

Differences Between Co-Borrowers and Cosigners

Can My Spouse Be My Cosigner?Co-borrowers can help when you have too little income, or provable income, to qualify for an auto loan. Cosigners, on the other hand, can help you out when your credit score is in a jam. Let’s breakdown the differences:

Co-borrowers are also called joint borrowers or joint applicants, and their income is combined to meet or exceed the income requirements of an auto loan. Both co-borrowers names appear on the vehicle title, and both are fully responsible for the car and the loan. Both of your credit reports will show the loan, as well. More importantly, though, both of your incomes combined determine the amount of auto loan you qualify for.

For instance, if you make $2,740.02 per month before taxes, and your spouse earns $2,078.40, the lender uses $4,818.42 as the basis for your income. This means you may be able to finance more, and ultimately may qualify for a wider range of vehicles. However, you must both meet all the auto loan requirements individually. And, only the lowest credit score between you is typically used to determine things like which interest rate or loan term you qualify for.

Cosigners, on the other hand, don’t help you out with income to qualify for the car loan – you have to do that on your own. Where they can give you a boost is in your credit score. Cosigners “lend” you their good credit score to help you meet the qualifications of auto lenders. In some cases, even if you meet the requirements, you may be able to use a cosigner with a better credit score to help you qualify for better rates or terms.

They also aren’t responsible for making your payment until the time when you can’t or don’t make it. When this happens, your lender comes to your cosigner to collect what you owe. Additionally, the negative marks from the missed payments show up on both your credit reports.

Cosigner or Co-Borrower?

When you’re shopping for an auto loan as a bad credit borrower, it can pay to have all the help you can get. But sometimes it can be tough to know whether you need a co-borrower or a cosigner. Here are three situations that may require someone else on your loan – but do you need a cosigner or a co-borrower?

  1. First-time car buyer If you’re new to the world of credit altogether as someone just starting out, or if you’ve simply never put a big-ticket item on credit, a cosigner is the go-to for a situation involving a poor credit score.
  2. On a tight budget – If you’re struggling to make ends meet on your own, or if it takes all your combined resources to run your household, taking on an auto loan may seem like a big step. But if you need a car to carry your family around, opt to use your spouse (or life partner) as a co-borrower. This gives you both shared responsibility and allows you to look at a wider range of vehicles than you may qualify for on your own.
  3. Past repo on your credit – If you have a repossession on your credit reports, even if it’s a year old, it can lower your credit score and color a lender’s view of how you might be as a borrower. To increase your credit score and possibly qualify for better rates or terms, a cosigner may be the way to go. Cosigners give peace of mind to lenders since they act as a backup payer if you fall behind.

Ready to Roll on an Auto Loan?

Now that you know the role your spouse can play in your auto loan, it’s time to find the right path forward with a dealer. If you’re struggling to get a car loan on your own, adding your spouse as a joint applicant may help. And, if you’re not sure where to start due to poor credit, we’ve got you covered at Auto Credit Express. Get connected to a local dealership that’s signed up with the lenders you need by simply filling out our fast, free auto loan request form.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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