123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Investing---Finance >> View Article

My Loan Co-signer Has Died - Will I Lose My Car To The Estate?

Profile Picture
By Author: Rob Parker
Total Articles: 312
Comment this article
Facebook ShareTwitter ShareGoogle+ ShareTwitter Share

In order to be approved for credit, about 10% of borrowers in Canada need to give the lending company (usually a bank) assurance in the form of a co-signer. A co-signer is someone who has a good and established credit rating already, and who agrees to assume the debt in the event that the person in whose name the money is lent is unable to pay.

In many cases, the co-signer of a loan is a member of the borrower's family; most other people will not assume the risk, although it could be a close personal friend with a good credit record.
In some cases, there is a risk that a co-signer may die before the loan is fully paid back, in which case the borrower may wonder what will happen to the assets purchased with the loan. In this scenario, we will use the example of a car in order to see how the situation will play out.

First of all, it is very important to note one thing; the co-signer of your loan does not, in fact, own the car that you needed to obtain the loan to buy. They are simply a guarantee to the lending company that someone will be able to pay for the car. Ownership will only revert to them if you have defaulted on the loan on your own, and they have had to make the payments themselves. In this case, the paper work will already have been changed to reflect the co-signer as the owner. In this case, you car will be part of the co-signer's estate, but otherwise it is your own property.

Of course, the death of the co-signer does lead to other issues, even though the car will still be yours. Probably most significantly, you may have to report to the lending company that you no longer have a co-signer to cover you in case of default. Now, the odds are that if you are a responsible enough person to do this in the first place, you have been sure to make your payments. In that case you should have no problems; here's why.

Remember that the reason you had to have a co-signer in the first place was due to bad or no credit (probably no credit record). Once you have been making payments on a loan, however, you have established a credit record. Lending companies now have a basis on which to approve you for a loan, so you will probably be able to secure the loan without the need of a co-signer.

Of course, most people will probably not even think of informing the lending company should a co-signer die; as long as you continue to make your payments, this will not be an issue. If you do default, though, and the co-signer is responsible, your car will become part of the estate.

Total Views: 115Word Count: 472See All articles From Author

Add Comment

Investing / Finance Articles

1. 5 Tips To Get Higher Returns From Share Trading
Author: Rashmie Dey

2. Budgeting For Entertainment: How To Have Enough Money For Fun
Author: Daniel Stewart

3. Mutual Fund Investment Strategies That You Can Benefit From
Author: QuantumAMC

4. Lend Shop – A Secure Platform For Emergency Loan
Author: John Quinn

5. The Budget Of Yours Is A Valuable Or Waste?
Author: joseph smith

6. How To Manage Your Finance If You Lose Your Job During The Pandemic 
Author: CMS Group

7. Entropy!!! Why You Should Know This?
Author: Deep Gajbe

8. Understanding Tax Collected At Source (tcs) For The Gold Industry
Author: Divya

9. 5 Reasons You Should Track Your Spending
Author: Daniel Stewart

10. Looking For Guaranteed Christmas Loans 2020 ?
Author: Christopher Jay

11. The World Of Fashion, Online Shopping And Discount Coupons
Author: joseph smith

12. How To Save Your Money On Groceries Items
Author: joseph smith

13. How Do Savings Accounts Differ From Emergency Funds?
Author: Daniel Stewart

14. Things To Consider Before Applying For Personal Emergency Loans In India
Author: Finway

15. Take Control Of Your Finances Once And For All
Author: Daniel Stewart

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: