few years ago a friend friend wound up owing additional
asked me to co-sign on an fees for breaking his lease.
apartment lease for him. When he couldn't afford those
This friend didn't have perfect fees, guess who the management
credit and couldn't get the company came after? That's right
apartment without a co-signer on - his co-signer, me!
the lease. He assured me that he
was cleaning up his credit; in When you co-sign for a loan or a
fact, the manager of the lease you're more than just a
apartment told him he could backup if the primary borrower
resubmit his application and can't repay his or her debts,
probably wouldn't need a you're a co-borrower! You share
co-signer after the first six the liability even though you
months of the lease. share none of the benefits of the
loan or lease. Lenders can turn
He pleaded with me to help him to you at any time to get back
this one time and promised me their money, not just when
that nothing could go wrong. So, they've exhausted all efforts
believing in my friend and that with the borrower.
six months down the road I could
have my name taken off the lease "My ex-husband co-signed for a
agreement, I took a chance and loan for a girl several years
co-signed the contract for my before we married. She was in the
friend. armed forces, and he got stuck
with the entire bill. It took
Three months later my friend lost years before it was paid off,"
his job, couldn't afford his rent said Marjorie, a forum
payments, and wound up moving participant at back in with his parents. href="http://www.savingadvice.com
Complicating matters worse, my /forums/?styleid=6"
title="http://www.savingadvice.co When considering co-signing, try
m/forums/?styleid=6" not to let your emotional
target="_blank">http://www.saving attachment or relationship with
advice.com/forums/?styleid=6. the borrower affect your
Christine, decision. If you must co-sign,
said "I do not recommend be cautious and take steps to
co-signing. I (now) feel strongly protect yourself and your credit
that if someone can't qualify on rating. Ask the lender to
their own for something, they contact you if the borrower
aren't ready to have it." misses a payment. Ask if you can
"Exactly. I would never co-sign co-sign on the principal only and
for a loan for family, friends, limit your liability for any
whatever. I'd rather (warily) other fees or penalties. It may
just give 'em the money," added be a long shot to get the lender
Jesse, another forum participant. to agree to these terms, but it's
Statistics support these worth a try.
unfortunate experiences. As
many as 75 percent of co-signers Finally, before co-signing a
are asked to repay loans when the loan, a lease, or anything -
original borrower has defaulted. THINK TWICE!
About the Author:
"© 2005, http://www.yourfreecreditreportnow.com
Author: James H. Dimmitt
James is editor of "To Your Credit" a FREE weekly newsletter focusing on managing your personal finances and credit. Subscribe and get a FREE copy of your credit report when you visit: http://www.yourfreecreditreportnow.com
Source: www.isnare.com
