Do not co-sign on a loan unless you are ready to pay the entire loan. No wait, this font-size isn’t emphatic enough.
Do not co-sign on a loan unless you are ready to pay the entire loan.
I cannot emphasize this enough. When you co-sign a loan, it is the same as signing a loan. Wait, actually, it’s worse. Because, when you sign a loan, you’re the one who owns the collateral. When you co-sign, you don’t own the collateral, so the owner of the collateral can take off with the collateral and you’re stuck. This sort of thing happens all the time.
Let’s say someone asks you to co-sign a bank loan. You have to remember, the bank is a professional risk assessment organization. Loaning money to people is their profession. They can tell, with a fair amount of accuracy, whether or not they will be paid back. If they’re asking for a co-signer, that’s because they don’t expect to be paid back by the person who’s taking out the loan. This should be a sign unto you. Perhaps a hint.
If the bank doesn’t think the borrower will pay, do you really want to co-sign on that same unreliable borrower?