In most cases, asking someone to co-sign on a loan is a bigger deal than asking them to marry you. When a person co-signs, a portion of your credit history becomes theirs. If you fail to make your payments on time or default, they can take a hit financially and on their credit history. Additionally, they frequently don’t know there’s a problem until it’s already a big problem.
When someone defaults on a loan with a co-signer, that’s usually when the lending institution finally gets around to notifying them of the problem. It can be difficult at that point to negotiate a reasonable pathway out without being a financial hardship on the co-signer.
Because of this, most co-signers are usually relatives who are willing to risk taking a hit to help a child, parent, sibling, or other close relative. Many times, this is to either bail them out of a problem or help to make a large purchase like a house or car.
When looking for a co-signer, your relatives are the first place to look. They are also the most likely people to say yes if you haven’t burned them in the past. Be very specific about what you need their help to get. You need to be able to prove your ability to make the loan payments on time. They may even ask if it is a house that the note be set up to have their name removed after 5 years or so.
In the case of a car, you will want to have their name included on the title so they can have the option of owning it if you default. This also protects them from you selling it for less than is owed since they have to sign the title for a transaction to happen.
Be very honest in working with a person when trying to get them to co-sign. Most people will bail out in a hurry if they smell a con job. Only ask people who you feel will increase your chances of getting the loan. Just another name on the application is not enough to make it happen. Your co-signer should be able to get the loan without you for them to be a sure bet.