The Truth About Debt and Relationships

Myth: When cosigning a loan, can I help a friend or relative.

Truth: Be prepared to pay the loan.

The bank wants a cosigner for a reason they do not expect a friend or relative to pay.

I think for a moment. If the debt is the most aggressive market of our culture today, in which providers must meet to sell "loan production" quotas, if creditors can not project the probability of a loan goes to default, with incredible precision, if all these things are true, and the lending industry has challenged a friend or relative of a loan, there is no doubt about the potential borrower has problems just looking for a place to happen. Yet, people across America make a little essay (yes, stupid) decision to CoSign someone else every day.

Why do registration

The lender requires a co-signer, because there is a very high statistical chance that the applicant will not pay. So why should we designate as the generous, all-knowing, benevolent help to reverse the decision of an industry that is foaming at the mouth to borrow money, and yet you find your friend or a deadbeat parent looking for a place to fail, or at least a loan default on the lookout for a new home? Why do we know the problems co-signer?

We will in this situation ridiculous about the emotions. Intellect could not take us for this trip. We "know" they will pay because we "know" them. False. Parents co-sign for a young couple buying a house. Why did they need a cosigner? Because they could not afford the houses! Parents co-sign for a teenager to buy a car. Why do parents do this? "Then he can learn to be responsible." No, what the youth has learned is: if you can not pay for something, buy it anyway.

If You Sign...

The sad part is that those of us who have co-signed loans how they end. We end up paying, but only after our credit is damaged or destroyed.

If you co-sign a car, the lender will contact you when the loan is paid late every month but your credit is damaged each month. Lender will not be with you before they take the car, but you now have a pension on your credit report. They will contact you to pay the difference between the debt and the redemption price of the sub-major they got to the car, which is called a deficit. If the lender does contact you, there's nothing you can legally do to force the sale of the car because you do not have it and you're just on the hook for the debt. When you co-sign on a house, you get the same results.

According to Proverbs 5:18 p.m.: "It is stupid to guarantee someone else's loan" (CEV). It's pretty much sums it up. Just trying to bless a loved one with a loan, many people try to help by co-signing, resulting in damaged credit and damaged or ruined relationships. I co-signed loans and eventually pay them. A poor fellow signatory to me, and it paid off when I went bankrupt. If you really want to help someone make money. If you have not, then do not sign up to pay because you probably will.