{"id":105,"date":"2017-06-05T12:00:00","date_gmt":"2017-06-05T12:00:00","guid":{"rendered":"http:\/\/www.consumerslaw.com\/blog\/5-signs-you-shouldnt-cosign-loan\/"},"modified":"2023-03-27T14:35:59","modified_gmt":"2023-03-27T18:35:59","slug":"5-signs-you-shouldnt-cosign-loan","status":"publish","type":"post","link":"https:\/\/www.consumerslaw.com\/blog\/5-signs-you-shouldnt-cosign-loan\/","title":{"rendered":"Why You Shouldn’t Co-sign a Loan"},"content":{"rendered":"

\"\"When friends or relatives can\u2019t secure a loan on their own, they may ask you to help by co-signing. A co-signer is often required for someone to secure a loan if they have poor credit<\/a> history, or a lack of credit history.<\/p>\n

Deciding whether or not to co-sign on someone else\u2019s loan is a personal decision. However, there are some red flags to be aware of, and it\u2019s important to understand that co-signing carries significant risk without much reward. Here are five signs to look for if someone asks you to co-sign a loan.<\/p>\n

1) The person in need of a co-signer has a history of late payments<\/h2>\n

Individuals often need a co-signer when their own credit has too many negative marks to secure the credit on their own. Generally, this means that they have had difficulty making payments on time in the past and their credit has taken a hit as a result.<\/p>\n

If you know that the person making the request has recently struggled with timely bill payments, it may not be a good idea to co-sign. If payments are missed, you\u2019ll be liable to repay missed payments immediately and risk having to pay the full loan balance if the co-borrower defaults.<\/p>\n

2) You anticipate needing a loan of your own in the upcoming months<\/h2>\n

Co-signing also affects your debt-to-income ratio. Even though you\u2019re not the primary borrower, the loan will appear on your credit report. You\u2019re liable for the payment of this loan, so it could affect your ability to secure a loan of your own. Before you co-sign, consider your current financial situation and whether or not you\u2019ll need your credit for your own purposes.<\/p>\n

3) You don\u2019t have backup savings in case anything goes wrong<\/h2>\n

If the primary borrower misses any payments, you\u2019re liable for those payments as the co-signer. Co-signers need to monitor the status of the loan and make sure all payments are made on time. They should also have backup funds in case the primary borrower lapses in payments.<\/p>\n

4) You\u2019re worried about your own credit<\/h2>\n

If you have concerns about how co-signing will affect your own credit, it\u2019s probably not a good idea. If the primary borrower defaults, this could harm your credit, and it can be difficult to rebuild<\/a>.<\/p>\n

5) Your instincts are telling you not to do it<\/h2>\n

Plain and simple: if you have a bad feeling about it, don\u2019t co-sign. It\u2019s likely not worth the worry and risk, especially if the primary borrower has a troubled credit history.<\/p>\n

Seek Legal Advice<\/h2>\n

\"\"Flitter Milz is a consumer protection law firm that pursues matters against lenders, debt collectors and the credit bureaus.\u00a0 If you have co-signed a loan and the primary borrower has defaulted, it’s possible that a repossession has occurred, collectors are contacting you, or your credit has been affected.\u00a0 Contact Us<\/a> for a no cost consultation to discuss whether your consumer rights have been violated.<\/p>\n","protected":false},"excerpt":{"rendered":"

When friends or relatives can\u2019t secure a loan on their own, they may ask you to help by co-signing. A co-signer is often required for someone to secure a loan if they have poor credit history, or a lack of credit history. Deciding whether or not to co-sign on someone else\u2019s loan is a personal … <\/p>\n

Continue reading Why You Shouldn’t Co-sign a Loan<\/span> →<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2,6],"tags":[41,44],"_links":{"self":[{"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/posts\/105"}],"collection":[{"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/comments?post=105"}],"version-history":[{"count":13,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/posts\/105\/revisions"}],"predecessor-version":[{"id":3119,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/posts\/105\/revisions\/3119"}],"wp:attachment":[{"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/media?parent=105"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/categories?post=105"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.consumerslaw.com\/blog\/wp-json\/wp\/v2\/tags?post=105"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}