Should I Co-sign That Loan?
Avoid co-signing except in special cases
Most financial experts agree that co-signing a loan for a house, car or other situations is dicey business, except in rare cases such as a small personal or school loan for your child. When a financial institution requires a co-signer on a loan, it means that it has flagged the borrower as a high-risk candidate. Under these circumstances, if you choose to co-sign you’re agreeing to assume the financial burden should the borrower default on the loan. According to the Federal Trade Commission, some studies revealed that three out of four co-signers are requested to repay the loan, indicating a high rate of default.