debt

5 reasons you should never be a co-signer

You'll be responsible for paying the loan
You'll be responsible for paying the loan © Mark Hayes/Shutterstock.com

You'll be responsible for paying the loan

When you co-sign, you are promising to pay the loan in the event the borrower cannot. In other words, you agree to be on the hook for someone else's debt.

"While your heart may be in the right place to help a loved one get the credit he or she needs, you are banking on this person to be responsible in repaying this loan," says Leslie Tayne, a debt resolution attorney in Melville, New York.

You are also taking on the full responsibility of inheriting the debt should that person become unable to pay or act irresponsibly in repaying the loan. "The fate of your credit standing, credibility and finances are essentially being put in his or her hands," warns Tayne.

This kind of trust can end badly and have life-altering financial consequences for a co-signer.

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