If you're someone with good credit and you're interested in buying a home or getting a line of credit to help you send one of your children to school then you might not have a whole lot of trouble securing a loan. But, there may come a time when someone in your life wants to take advantage of your years of responsible spending by asking you to co-sign on a loan so that they can open their own Alberta laser clinic or buy their first car. If this is someone very close to you then you might be considering helping them out. But you should know exactly what you're getting into before signing anything.
The first thing that you should realize is that the reason that a lender asks for a cosigner on a loan is that they are not confident that the person looking for money will be able to pay it back on their own. While someone that you know might need funds to help them pay for the installation of air conditioning, Hamilton university payments at McMaster or for a mortgage on a home, you should realize that if you cosign and they are unable to make their payments that the responsibility will be on you. Most people asking you to cosign will assure you that they will not miss a payment but even the best intentions can go wrong along the way.
Before you cosign you should make sure that you could afford to make their payments should they default on the loan. If you're working hard as an emergency dentist Toronto based and have a good income then you might have enough to help send your daughter to school overseas or be able to aid a sibling when they want to buy a new car. But, if you're struggling to pay off your own debts then you should definitely think twice about cosigning for someone else. It is always important to keep in mind that this is something that could affect your credit rating as much as making payments on your own Toronto mortgage loans can.
Once you have read and understand all of the risks, it's up to you whether or not you feel comfortable being a cosigner. There are likely at least a few people in you're life that you're willing to take the risk for to help them out. Hopefully it will turn out according to plan and won't mean that you need Mississauga counseling to repair your relationship down the road if you are required to pay for them.
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