Co-Signing Loans New Hartford NY

If you have good credit, you may be asked to co-sign for a loan in New Hartford at some point. Perhaps your child needs to borrow money to buy her own car but has never had any credit in her name. Or maybe your cousin is recently divorced and needs to borrow money to make a new start.

Local Companies

Mr. Dennis Coughlin, CFP®
(315)765-6032
610 French Rd
New Hartford, NY
Mr. Michael Evans, CFP®
315-738-4579
PO Box 895
New Hartford, NY
Mr. Robert Tarry Jr., CFP®
(315)363-7701
200 Betsinger Rd
Sherrill, NY
Mr. Joseph Talerico, CFP®
(315)733-8725
119 Eastwood Ave
Utica, NY
Mr. Philip Buttiglieri, CFP®
315-736-4235
17 Devereux Ln
Whitesboro, NY
Mr. Stephen Golembiowski, CFP®
315-896-4040
PO Box 31
Barneveld, NY
Mr. Jeffrey Gornick, CFP®
315-733-3131
2 Stanhope Ct
New Hartford, NY
Ms. Theresa Flemma, CFP®
315-738-4583
555 French Rd
New Hartford, NY
Ms. Andrea Johnston, CFP®
315-798-2788
268 Genesee St
Utica, NY
Mr. Mark Lewandrowski, CFP®
(315)724-5078
2406 Genesee St
Utica, NY
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co sign loansFor those with flawed or non-existent credit records, it can be quite difficult to borrow money. In many cases, the only way for them to do so is to obtain a co-signer. This allows the lender the opportunity to collect from someone with a better credit record if the borrower defaults.

If you have good credit, you may be asked to co-sign for a loan at some point. Perhaps your child needs to borrow money to buy her own car but has never had any credit in her name. Or maybe your cousin is recently divorced and needs to borrow money to make a new start. Whatever the reason may be, it’s important to know the potential consequences of co-signing for a loan before you go through with it.

Co-signing subjects you to a number of risks, including the following:

  • If the borrower misses payments, your credit could be adversely affected. Even though you’re not the one making the payments, you’re still on the hook for them. And in most cases, the lender is not required to notify a co-signer of missed payments. Your credit rating could be taking a nosedive through no fault of your own and without your knowledge.

  • The lender is not required to attempt to collect the debt from the borrower before going after the co-signer. The bills and late notices may come to the borrower, but if there is a default, the co-signer may be the one who starts receiving calls from a collection agency. Lenders know that they are more likely to receive payment from someone with good credit, so use their resources to pursue the co-signer rather than going after someone who is less likely to pay up.

  • Co-signing for a loan can prevent you from borrowing money for yourself. Even if the borrower makes every payment on time, the outstanding balance is displayed on your credit report. This raises your debt-to-income ratio, and could result in denial of credit when you need it.

  • If the borrower fails to repay his debt and you can’t pay it for him, you could lose your property. The lender could take any collateral that you put up for the loan and sell it. Even if property obtained with the loan is repossessed, you could still be liable for the difference between the selling price and the amount owed. If you don’t pay, the lender may be able to put a lien on your home or garnish your wages.

  • Co-signing a loan for anyone is risky business. Lenders require a co-signer because they do not believe that the borrower will repay the loan, and in many cases, they’re right. Before you sign on the dotted line, think about the ramifications. You might be helping someone you care about in the short term, but it could seriously damage your relationship (and your credit record) in the long term.

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