Financial risk
None of this is expert advice. It's what people worked out for themselves, usually the hard way — what actually helped, and what they'd tell someone standing where you are. Take what fits and leave the rest.
Do not co-sign any loan unless you are prepared to pay the full amount yourself.
You become fully responsible for the debt without access to the product, especially if the borrower does not qualify due to poor credit or insufficient down payment.
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- Think of co-signing as actually signing the loan yourself, meaning you are borrowing the money.1
- Do not co-sign unsecured debt like credit cards unless you have access to the account or can set limits.1
Require the borrower's name to be on the deed or title if you must co-sign, to give yourself a financial interest.
If there is nothing in it for you, there is no reason to sign.
one person who lived it
Never co-sign an apartment lease.
You are liable not just for rent but also for damages if the apartment is trashed.
one person who lived it
Understand that lenders will pursue you first for payment if a co-signed loan defaults.
Lenders target the co-signer because they typically have better credit than the primary borrower.
one person who lived it
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One approach that helped: manage the finances of the family member you co-sign for to ensure bills are paid and credit is protected.
It provides peace of mind knowing bills are paid and protects credit.
one person who lived it
Refuse to co-sign for family members who have a history of poor financial decisions.
Requiring a co-signer often indicates patterns of poor financial decision-making, such as credit card debt or defaulting on previous loans.
one person who lived it