The act of cosigning a loan is signing a loan with the person who is acquiring the loan. When you cosign on a loan, you are signing a contract that makes you responsible for the entire debt without receiving any part of the loan.
There are several consequences that may result from you cosigning a loan:
A cosigner can be held liable for up to the full amount of the loan and an additional late fees or collection costs.
If the information is correct, it can last on your credit history up to seven years.
Remember, creditors are required to give you a notice that explains your obligations as a cosigner. Make sure you understand the terms of the notice given to you.
Since cosigner rights vary by state, you should consult a business lawyer in your state regarding your rights as a cosigner. A finance lawyer could provide helpful tips before, during, and after the cosigning process to protect your credit.
Last Modified: 04-11-2018 08:42 PM PDTLaw Library Disclaimer
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