Difference between revisions of "Co-Signing or Guaranteeing a Loan"
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===If you guarantee a loan=== | ===If you guarantee a loan=== | ||
A lender who’s nervous about loaning someone money may ask for a | A lender who’s nervous about loaning someone money may ask for a guarantee. A guarantee is a promise by another person to pay the debt if the borrower doesn’t pay. The person guaranteeing the debt is the "guarantor". | ||
====The guarantor’s responsibility for the debt==== | ====The guarantor’s responsibility for the debt==== | ||
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Before you sign a guarantee, find out what type of guarantee it is. A guarantee document may have one or more of these types of guarantee. | Before you sign a guarantee, find out what type of guarantee it is. A guarantee document may have one or more of these types of guarantee. | ||
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===If you co-sign for a loan=== | ===If you co-sign for a loan=== | ||
When you '''co-sign''' for a loan, you and the borrower are now equal owners of the debt. You are “joint debtors”. Each of you is independently responsible for paying back the loan. If one of you fails to make payments, the lender can expect money from the other. The lender needn’t even ask the borrower. They can come directly to you. | When you '''co-sign''' for a loan, you and the borrower are now equal owners of the debt. You are “joint debtors”. Each of you is independently responsible for paying back the loan. If one of you fails to make payments, the lender can expect money from the other. The lender needn’t even ask the borrower. They can come directly to you. | ||