RICHMOND, Virginia (WWBT) – Not everyone is eligible for a loan. Sometimes you need a little help from a co-signer. But should we do that? Be the person signing their name on someone else’s loan?
There are two ways to think about co-signing. Because it can be very positive or maybe a very negative experience.
Cherry Dale, Virginia Credit Union financial coach, says you want to look at what you’re co-signing for and the overall risk. “If you co-sign with another person. Basically you sign up to make sure you’re responsible for making sure that bill gets paid, ”Dale said.
So, if the other person is the primary debtor on this loan, you are still responsible for the debt. Especially if they default and don’t pay.
Dale says you have to really trust the person you’re helping.
The loan could affect your ability to borrow at the end of the day. Even if you are just co-signing a $ 5,000 credit card for your child … it will count against you if you are looking to buy a house.
Something to consider. Dale says communication is the key. Define the rules for knowing who pays … and knowing when the invoice is due. “One of the things you can do is just make sure you’ve set up an account where you both can see it. Most financial institutions will do this with you online,” Dale said.
If you are co-signing for your child, you may be able to ask them to pay you each month. This way, you can take care of the actual bill so that you know it gets paid on time.
Copyright 2021 WWBT. All rights reserved.
Send it to 12 here.
Want the best NBC12 stories delivered to your inbox every morning? Subscribe here.