Don’t Co-Sign a Loan for Another Person
I was just watching the Suze Orman show and she made it very clear not to co-sign a loan for another person. She has said this often and it is an important point that I thought I would share here. If you co-sign a loan for someone you are vouching for them and taking the responsibility. The person would not have gotten a loan otherwise if it wasn’t for you. If they default on the loan they have no responsibility and it will hurt you and your credit. So don’t get yourself stuck in this mess and learn to say no.
Wrote on December 4, 2008 @ 5:59 pm
Suze is right on the money with this one. Why would you vouch for someone who has already proven that they lack financial responsibility which is reflected in their credit score? If they’ve burned other creditors in the past what would make a person think this time would be any different.
Wrote on December 25, 2008 @ 12:27 am
Thanks for the interesting article.
Wrote on March 6, 2009 @ 5:05 am
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Wrote on April 7, 2009 @ 6:14 pm
You should not determine whether or not you’d cosign a loan for a loved one based on this woman’s flawed perceptions. Sometimes a person’s need for a cosigner does not mean they’re economically irresponsible, or have been in the past. For instance, a loved one may need a private student loan if they are going to a really good college. Without family or friends to cosign, it will be impossible to graduate and make the kind of big bucks you’ll make with an ivy league degree. Consider the person’s situation, and whether or not they’ve been trustworthy in the past. Otherwise, there’s no upward mobility for people of low privelage. Got to support each other, on and off of paper.
Wrote on April 14, 2009 @ 4:41 pm
Sam, I don’t agree with what you said. My husband cosigned someone else’s private student loan. The person graduated from Ivy League school but still didn’t pay the loan. Now we’re stuck with it. Just consider the statistics, 3/4 of the cosigners end up paying for the loan they cosign for. If that number doesn’t scare you, then you’re either dumb or naive.
Wrote on September 29, 2009 @ 1:52 pm
I agree with Sam on this one. Refusing to cosign based on what one woman believes is ridiculous. I had to get a cosigner for my small business loan…my credit score is great…i raised 20k for the downpayment…and the business I am buying is already doing very well. It’s unreasonable to think that people should never cosign under any circumstances…