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-Being a Loan Co-signer
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LOAN COSIGNERS
Below is information that explains the basics of loan cosigning. If you have any questions, please contact us.

Are You In Need of a Loan Cosigner?
Getting a cosigner is never easy. Always start by asking friends and family first. Explain what the reasoning for your loan is and what your goals are in terms of establishing or re-establishing your credit. You want to make the person that is going to cosign for you confident that you will re-pay your loan.

 

Already Have a Cosigner? Want To Apply For a Loan?
Utilizing a cosigner will assist you in achieving approval and lower interest rates for the following loan products offered by Star Loan Services:
First Time Mortgages - Get more info about parents co-signing mortgages.
Auto Loans With Bad Credit
No Credit Car Loans
Car Financing with Bankruptcy
Student Car Loans
Bad Credit Unsecured Loans
Personal Loans With No Credit
Bankruptcy Unsecured Loans

Being a Cosigner Means You're Financially Responsible-Consider the Risks
Becoming a cosigner means that you are guaranteeing payment if the person you are signing for does not pay their loan. Basically, you are assuming a risk that the lender would not take. Is that something you really want to do?

When evaluating whether or not to cosign a loan, think about the following:
  -- Can you afford to pay the loan? If the borrower goes into default, and you can't pay, not only will your credit rating be negatively affected, your become vulnerable to being sued by the creditor.
  -- Your ability to obtain any sort of personal credit and/or loans decline as a result of your obligation as a cosigner. The debt you are cosigning for is going to be considered your debt.
  -- If you are going to use your home, car, or other form of personal property as collateral, understand that these items can be taken away if the borrower fails to make payments. Learn more about how secured loans work.
  -- Not only will you become responsible for the debt if the borrower does not make payments, you are going to be responsible for all late fees and collections costs as a result of the outstanding debt.
  -- Use the personal loan calculator to pre-determine exactly how much money you are going to owe before committing as a co-signer.
  -- Contact the lender to make sure that you are going to be notified in writing as soon the person you are co-signing for misses a payment. This will allow you to try and rectify the situation before the account goes into collections. Collections will result in you having to pay the entire debt amount at once.
  -- Obtain copies of all the terms and stipulations of the loan.
  -- Know what your rights are as a cosigner.

Some More Tips to Pursue If You are Going to Be a Co-Signer
It is likely that you can negotiate the liability that you will be obligated for if the loan goes into default. Meaning, you can have your liability committed to only having to pay the loan balance, and not any late fees and/or court and attorney fees. When negotiating these issues, make sure you get the end result in writing.

 

When Is It Beneficial to Be a Loan Cosigner?
If you are confident that the borrower can repay the loan, it can be sensible to cosign for their loan. For instance, it makes sense for a parent to co-sign a mortgage when their adult child with a good income is looking to buy a house for the first time, but have no credit. Cosigning in this instance will help obtain the loan and build the child's credit.

Also, an individual's credit may get severally tarnished as a result of a divorce. This will result in the inability to obtain credit even though they have a solid income. This is an instance when co-signing a small loan will help re-establish credit for the borrower. Learn what kinds of debt are shared debts.

Although the instances above are examples of the benefits of loan co-signing, statically, being a cosigner is a risky move. In fact, studies have shown that four out of five cosigners end up having to pay the debt for the borrower.


 

 

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