Personal Loans - Being A Co Signer

If you are finding it difficult to find a personal loan or being accepted for a personal loan then there are ways to secure the deal for you.

Asking a friend or family member to be a co signer on your personal loan is just one of the many ways you can increase your chances for getting the loan you need.

It is important to remember when asking someone to be a co signer you are asking a lot from them, being a co signer can mean that the person in question is putting their credit on the line for you, should you fail to keep up the payments of the loan this could effect them getting a loan themselves later in life.

Understanding what the implications are when being a co signer is the first step. You will need to know what your responsibilities are to the loan and what the effects would be if the borrower fails to keep up the payments

If you are a co signer you need to be aware that this will show up on your own credit report and may be used to calculate your credit score should you try to obtain a loan your self.

After a certain amount of time borrower is eligible to ask the loan company to take over the loan in their own name. If the payments have been kept up to date then this is not normally a problem and will free the co signer of any ties to the loan.

As a co signer always ask to have access to any account details, allowing you to make sure the payments are being made and if there is a chance of a payment being missed you may need to help out to save your credit rating.

Most people need a loan for cars, home improvements and other living essentials, it is important to find out the reason the person is taking out the loan in the first place, if it is due to poor money management you will need to consider if you really are helping this person.

If the loan is for an unforeseen event and you are willing to help then make sure you calculate your own finances first to determine if you can afford to pay the loan should the borrower default.

Offering to be a co signer for anyone should not be taken lightly, your financial history and credit rating will be put on the line and you may have to resort to paying the loan yourself to save this for being effected.

You may also find that being a co signer for a friend or family member could cause problems with your relationship, if the borrower defaults then you are not going to be happy leading to an uncomfortable relationship. If you really feel that this is something you can not do then do not be afraid to say no.