The title pretty much explains it. What’s your take on cosigning a loan?
Cosigning puts your credit at their mercy. I made the mistake once, thinking it was temporary—it’s been years now.
Khai said:
Cosigning puts your credit at their mercy. I made the mistake once, thinking it was temporary—it’s been years now.
That’s tough. Thanks for sharing your experience.
Only cosign for your spouse. No one else.
Speaking from experience, don’t cosign. Even if they pay on time, it could still cause issues. If they don’t, you’re responsible for the debt. My parent cosigned for my sister, and when she lost her job, everything spiraled out of control. It’s not worth the risk.
@Micah
Exactly. Trusting someone fully is harder than it seems, especially when they might be too embarrassed to tell you they’re struggling. If you want to help, find a way that doesn’t tie your credit to theirs.
Cosigning counts as debt for you and can affect your debt-to-income ratio. Even if payments are on time, it could impact your ability to get loans in the future. If you want to help, give money you’re okay with not getting back. Don’t cosign.
It shows as debt on your credit report. Whether it impacts you depends on your current credit situation, but it’s a possibility.
Yes, it will appear as your debt. Payments made on time will also reflect, but it’s still listed under your credit.
Everyone here is saying don’t do it for a reason. I cosigned once, and it ended up ruining my life for a while. Don’t make the same mistake.
You only find out they’re late when your credit gets hit or the creditor calls, usually after 90 days. It also affects your ability to qualify for loans since it’s included in your debt-to-income ratio. Even after a year of on-time payments, it might still be considered.
Yes, it’ll show as a credit line on your report and impact your utilization rate. Lenders treat it as if it’s your debt.
As a lawyer (not yours), I’d say never cosign. If the lender thinks they’re a high risk, that’s why they need a cosigner. If the borrower can’t pay due to job loss, illness, or anything else, it’s your problem now.
Cosigning often backfires. The saying ‘The road to hell is paved with good intentions’ exists for a reason.
I cosigned for my kid, but only for a $5k loan with manageable payments. I can’t imagine doing it for a $20k loan—it’s just not smart.
Be cautious with cosigning. Even if you trust them, unexpected situations like job loss or accidents could mess up your credit. Only do it if you’re prepared to cover the payments yourself.
Chen said:
Be cautious with cosigning. Even if you trust them, unexpected situations like job loss or accidents could mess up your credit. Only do it if you’re prepared to cover the payments yourself.
That’s my thinking too. I’ll only do it if I can afford to cover any missed payments.
@Ode
Are you okay with paying the whole loan if something happens to them? That’s the real question you need to ask yourself.
@Ode
How do you plan to cover late payments if they don’t tell you they’re struggling?