With the economy still gasping along, more and more families are running into credit problems. For some, bankruptcy is the only solution. Others try to restructure their debts. And still others try to borrow money from friends or relatives. If you’ve ever been in this situation–either as the borrower or the lender–you won’t want to miss this guest post by Briana Fabbri.
Do you have friends or relatives who are having trouble getting a loan? Have you considered co-signing a loan for them?
While you may have both good credit and the best intentions, you should carefully consider the ramifications before you agree to co-sign a loan:
- First and foremost, lenders will treat this loan as if it were made directly to you. If the borrower fails to make the loan payments in a timely manner, your credit rating could be affected. The missed payment could be reported to your credit report, and would potentially reduce your credit score. [Read more…]