If you' ve gotta do it here' s how to lower your risk
Alamy Thinking of cosigning a loan for a friend of loved one? There are better options. Here's some good money advice: Don't cosign someone else's . A new survey from shows that 38 percent of cosigners lost money because the primary borrower whiffed, 28 percent saw their credit score drop, and 26 percent said their relationship with the primary borrower soured. Yet there are times—when your freshly minted college grad needs to lease an apartment, for example—when there don't seem to be other options. In fact, there often are.
Buying a car
Helping the borrower with a larger instead of the financing itself can eliminate the need for a cosigner in some cases. A letter from a borrower's employer that outlines terms of salary can also help. Or consider an inexpensive used car. are more reliable than they used to be, even used ones. If you choose to cosign, make sure your name is also on the title. You're taking the same risks as the primary borrower so you should have the same rights.
AARP Disounts
as an AARP member
Borrowing for education
With the exception of PLUS loans, cosigners aren't usually required for federal student loans. So max out those before looking at private ones, says Dan Macklin, cofounder of SoFi, a firm that refinances . Note, too, that some loan contracts allow for the release of a cosigner if the primary borrower makes a certain number of payments on time. If you do cosign, ask the student to plan to refinance the loan to eliminate your obligation as soon as he or she has an income, Macklin says.
Leasing an apartment
First-time renters can often get an apartment without a cosigner by subletting or by becoming a roommate in an apartment that already has a . Cancel You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits. Your email address is now confirmed. You'll start receiving the latest news, benefits, events, and programs related to AARP's mission to empower people to choose how they live as they age. You can also by updating your account at anytime. You will be asked to register or log in. Cancel Offer Details Disclosures
Close In the next 24 hours, you will receive an email to confirm your subscription to receive emails related to AARP volunteering. Once you confirm that subscription, you will regularly receive communications related to AARP volunteering. In the meantime, please feel free to search for ways to make a difference in your community at Javascript must be enabled to use this site. Please enable Javascript in your browser and try again.