osigning on a loan can be may have to pay the full amount
a great way to help a of the debt if the borrower does
family member or close not pay. In addition, as cosigner
friend when they need help, but you may also have to pay any late
it can also be a great way to fees or collection costs.
ruin your own credit if things do
The lender may collect this
not work out. debt from you without first
Before you decide to cosign on a trying to collect from the
loan, you should always read the borrower (in some states where
cosigning agreement that lenders this is allowed). In addition,
have for these. By law, the the lender may use the same type
lender must show you a copy of of collection methods against you
the agreement before you sign for as he might use against the
the loan. In some states this is borrower. This might include
called a cosigner's notice.
garnishing wages or suing you.
The cosigner's notice usually You should also know that if this
contains language such as debt goes into default, that
this:
issue may become a part of your
As cosigner for the loan, you credit record.
are being asked to guarantee this
Before you agree to cosign for
debt. You should consider this a loan, keep in mind that some
carefully before you do it. If studies have shown that as many
the borrower does not pay the as 75 percent of cosigned loans
debt as agreed, you will have to go into default at some time, and
pay it. You should be sure that that the cosigners are then asked
you can afford to pay if you have to pay. A good rule of thumb to
to, and that you want to accept remember is that when you are
this responsibility as being asked to cosign on a loan
cosigner.
you are being asked to assume a
As cosigner for the loan, you risk that the lender would not
take. Future creditors will consider a
Cosigners should also cosigned loan as one of your debt
understand that in most states if obligations.
the person you signed for does
It is usually a very good idea
not make the payments on the loan to ask the creditor, in writing,
the creditor can immediately to notify you if the borrower
begin to collect from you. This misses a payment. This will allow
can be done without the creditor you some time to deal with the
having to first track down the problem or make back payments
person you cosigned for. You will without having to repay the
be made to pay any fees or entire amount immediately.
attorney's fees if there are any.
You also want to make sure
Lastly, the wages from your job that you get copies of all the
or your own personal property can important documents associated
be seized as payment.
with the loan. Do not be timid
It is true that there are many about asking for these. You may
risks involved with cosigning for need them later on.
a loan, but even so there may be
times when you feel comfortable
Remember that this loan may align="center">
keep you from getting your own
loans until it is paid off.
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Article Tags: debt, loan, pay
