The Hidden Risks of Helping Out
Cosigning a loan for a family member or close friend may feel like a generous gesture of support.
However, lenders require a cosigner precisely because the primary borrower's credit score or income history poses significant repayment risk.
What You Put at Stake
As a cosigner, you assume full financial responsibility for 100% of the loan amount plus collection costs, without receiving any ownership of the financed asset.
Questions to Ask Yourself
Ask if you can comfortably afford monthly payments out-of-pocket if the borrower loses employment or refuses to pay, and whether it will strain your personal relationship.
Protecting Your Rights
Ensure you receive duplicate monthly billing statements, set up payment tracking alerts, and clarify cosigner release terms in writing prior to signing.
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Loretta Kilday
Debt Relief Specialist & Spokesperson, DebtCC
Loretta Kilday, Esq., is an accomplished litigator and transactional attorney with more than 30 years of experience across debt collection, bankruptcy, and related matters. DebtConsolidationCare features her as its spokesperson and public voice. She earned her J.D. from DePaul University College of Law and a B.S. in Finance from DePaul University.