Q. What's the risk of co-signing a loan, especially college loan?
A. When you co-sign a loan or credit card account, you are liable for any debt incurred.
According to Federal Trade Commission, 75% of all co-signed loans in default are ultimately repaid by the co-signer, not the original borrower. Lenders will act quickly to contact co-signers when payments are late. Delinquencies are also reported on the co-signer's credit report, this put your own financial wellbeing at risk when you co-sign a loan.
Co-signing a college loan has probably the highest risk because government could debit the social security benefits of recipients who co-signed loans. In 2015 alone, $171 million was taken from about 114,000 recipients age 50 or older who had co-signed loans that had been in default for at least one year.
A. When you co-sign a loan or credit card account, you are liable for any debt incurred.
According to Federal Trade Commission, 75% of all co-signed loans in default are ultimately repaid by the co-signer, not the original borrower. Lenders will act quickly to contact co-signers when payments are late. Delinquencies are also reported on the co-signer's credit report, this put your own financial wellbeing at risk when you co-sign a loan.
Co-signing a college loan has probably the highest risk because government could debit the social security benefits of recipients who co-signed loans. In 2015 alone, $171 million was taken from about 114,000 recipients age 50 or older who had co-signed loans that had been in default for at least one year.
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