We all know that cosigning on a loan is not a decision to be made lightly. When deciding, here’s something else you’ll want to consider: Thirty eight per cent of cosigners end up paying the debt they sign off on.
Photo by 24oranges.nl.
A new survey from CreditCards.com found that four in 10 cosigners lose money. They interviewed over 2000 cosigners and found:
Lost money: 38 per cent of co-signers had to pay some or all of the loan or credit card bill because the primary borrower did not.
Credit damage: 28 per cent experienced a drop in their credit score because the person they co-signed for paid late or not at all.
Hurt relationships: 26 per cent of respondents said the co-signing experience damaged the relationship with the person they co-signed for.
Of course, you should think twice before cosigning in general, but it’s an even riskier option if you’re already struggling financially and the borrower has a shaky financial history. For more on their survey, head to the link below.
Poll: 4 in 10 co-signers lose money [Creditcards.com]