|
Co-signer responsibilities
Co-signer responsibilities
What is involved?
A family member or friend asks you to co-sign or guarantee a loan: what does this mean and what is required of you? Keep in mind that acting as a co-signer does not mean simply signing your name at the bottom of a contract so that someone can get a loan — there is much more to it!
You are in fact making a commitment to a financial institution to repay the loan if the other party that signed the contract is unable to do so. Carefully consider the circumstances of the friend or family member who is making the request. If the financial institution requires a co-signer, there is undoubtedly a very good reason. Perhaps the financial institution feels this person represents too high a risk. If this person does not meet their payments, a court could issue a judgment requiring you to repay the debt in full. This could adversely affect your credit file as well as your finances.1
Before agreeing to act as a co-signer, ask yourself the following question: can you really afford to repay the entire loan yourself?
|
