Cosigning a loan can be a helpful way to assist a friend or family member in securing financing. But what happens if you cosign a loan and the other person doesn’t pay?
As a cosigner, you are legally responsible for repaying the loan if the primary borrower fails to make payments. The lender can demand full repayment from you, including interest and late fees, without first attempting to collect from the borrower. This can impact your credit score and financial standing.
With decades of experience helping individuals understand their financial obligations, I’ve seen firsthand how cosigning can lead to unexpected financial burdens. Let’s examine the risks, consequences, and steps you can take to protect yourself.
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