Standup: I'm Kristin Arnold. The credit crunch is affecting more than home loans. Car loan money is also getting tighter, and that may steer more people into co-signed loans. But before you consider asking for help, or giving it, here�s a little borrower�s education from Bankrate.com.
Voice over 1: With the nation in the grips of a credit crunch, borrowing for big-ticket items is getting tougher, which may increase the popularity of co-signing. Someone with strong credit guarantee a loan for someone with weak credit.
Voice over 2: First rule of co-signing a car, or any other kind of loan? Don�t do it. Because if that friend or family member doesn�t make those payments, both your credit and your relationship could be in jeopardy.
Voice over 3: Listen to what this finance manager said when I asked him if he would co-sign a loan for a friend.
SOT: �I personally wouldn�t. I�m an old-fashioned guy. If it�s my wife, sure.�
Voice over 4: But if you�re determined to go down this road, at least use some safeguards. Example: if you�re co-signing a car loan, make sure your name is on the title as co-owner. You owe, you own.
Voice over 5: And be sure payments are getting made. If they�re late, your credit is dented. If there�s a repossession, your credit is totaled. Stay in the loop.
Voice over 6: Same thing with insurance: make sure it stays in force. If your borrower is missing car payments, they could be missing insurance payments too. And if that car gets wrecked or stolen, it�s all you.
Standup: Now you can see why co-signing any kind of loan is risky business: you�re taking someone who�s already wrecked their credit history and putting them behind the wheel of yours. So before you co-sign for anyone, look under their hood carefully. For Bankrate.com, I'm Kristin Arnold.
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