Considering Co-Signing for a loan?
Co-signing for another person could be a very difficult decision for you. It should be! When you decide to co-sign you are agreeing to take responsibility for the debt if the primary borrower cannot make the payment.
When Co-signing for a loan consider it your debt, especially when reviewing your budget.
Sometimes co-signer’s are needed when a person is trying to establish credit or re-establish credit. You may want to help your child purchase a home or a car, co-signing with them could make the difference between getting a loan or not.
Remember, even though you trust the person you are co-signing with everyone’s financial situation is subject to change and neither you nor they may have any control over it.
Keep in mind what happens to your credit when co-signing for a loan as well. If the person making the payments always makes them on time, it will have a positive impact on your credit. If for some reason they are making late payments, it will negatively impact your credit. Sometimes you don’t even get a call from the creditor until it is too late and it has impacted you negatively.
