Cosigning a car loan can be a risky decision. If the primary borrower stops making payments, you'll be responsible for the entire debt. This could damage your credit score and make it difficult for you to get approved for other loans in the future.
Before you cosign a car loan, make sure you understand the risks involved. Talk to your financial advisor to make sure you're making the right decision.
Here are some things to consider before cosigning a car loan:
- The primary borrower's credit history. If the primary borrower has a poor credit history, they may be more likely to default on the loan.
- The primary borrower's income and employment history. Make sure the primary borrower has the financial means to repay the loan.
- The amount of the loan. The larger the loan amount, the greater the risk you're taking on.
- Your own credit score. Cosigning a car loan can hurt your credit score if the primary borrower defaults on the loan.
If you're not sure whether or not cosigning a car loan is the right decision for you, talk to your financial advisor.
