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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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