I'm in the process of getting approved for an auto loan. My credit union will give me 1.99% financing if I co-sign with someone (I have clean credit history, but have no "substantial installment" loans that they'd like to see). Therefore, they require a co-signer. The dealership will offer me the loan over the same term for 2.99%. This equates to about an $800 increased cost over the term of the loan. However, the dealer doesn't need a co-signer. I can get a family member to agree to co-sign the loan, but my question is, is it in my best interest (in terms of credit worthiness) to get a loan by myself? The co-signer will simply be a guarantor of the debt, but I don't know if that shows up differently to the credit agencies compared to a co-signer who pays half the debt. Is co-sigining worth it to save the $800 or is it in my best credit interest to be the sole owner of the debt?
It doesn't matter to the credit agencies if there is a co-signer or not. However, your family member will need to take into consideration if they are willing to be responsible for the loan in the event you are unable to make payments. Being a co-signer means they are agreeing to pay the loan amount. It will also impact their credit score/report, either improve it if all goes well, or destroy it if neither one of you are able to pay the loan. So to you, assuming you can pay all the payments and not default, it makes no difference. But to the co-signer, it could create a huge impact.