Co-Signing A Loan
Co-signing a note or loan, it makes you personally responsible in the event the borrow fails to pay. You may even be liable for the court costs and lawyer's fees if the lender sues to collect.
There are certain things you should bear in mind if you are considering co signing:
--Be sure you can afford to pay the loan. You may have to;--Try to get the lender to agree to limit your liability; --Don't pledge your car, furniture or other property;--Ask the lender to agree in writing to notify you if the borrower misses a payment. Notification should come before a late charge is added and always before the loan is accelerated, which means the whole loan is demanded and not just a back payment or two;--Make sure you get copies of all-important papers signed by you or the borrower.These include the loan contract, the Truth-In-Lending disclosure statement, and in the case of a sale on credit, any warranties on the product;--Most important, don't be pressure. Take your time and carefully evaluate the risks.