Building credit is tough.
So should you help out a friend or family member by co-signing on a loan?
The answer is almost always no.
So if lenders say no, chances are good you should say no too.
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Here are some things to consider before co-signing a loan.
You are agreeing to pay the entirety of the loan if the borrower stops making payments.
Did you know?
That is, of course, unless the car is repossessed or the house is foreclosed on.
Will you be a helicopter co-signer who regularly checks in on their finances, risking resentment on their end?
Will you know how to talk to the co-signer about missed payments?
What happens if your borrower refuses to pay; will you lose that relationship?
Id caution people to think very carefully about the harm co-signing can do to a relationship, Hartill said.
Co-signing is something you do to help someone you care about.
What You Should Do If You Co-Sign a Loan
Sometimes, saying no is impossible.
you could also request alerts for missed payments and access to the online payment portal.
In that case, you and the borrower could attempt to refinance the loanwithoutyour signature.
However, the primary borrower must sign off on the release form, and the lender must approve it.
Those are two tough hurdles to jump through.
If theyre having a tough month, offer to step in and help pay for rent.
Suggest a Bad Credit Loan
Some lenders will offer loans to borrowers with poor credit.
These loans typically carry unfavorable terms, like high interest rates.
He lives in Ohio with his fiance.
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