If I sign on someone else's car loan as a cosigner, how can I protect myself?
How can I protect myself as a cosigner? My nephew wants me to sign on his car loan so he can get approval. I'm fairly certain this won't pose an issue as he's responsible for his age. His disapproval is mostly the result of no credit history.
“It’s okay for you to act exactly as the bank would and even be more upfront. Let your nephew know that if he fails to pay, it hurts your credit as well.
If he’s a few days late, it shouldn’t hurt your credit, but it will give you time to discuss the matter.
Be frank and direct. Tell him that it’s not acceptable to miss a payment, but if he’s going to, he needs to call you days beforehand.
By doing this, you can protect yourself while holding your nephew responsible.
Remember: use your better judgment as a cosigner. If you don’t trust your nephew, don’t sign.
Also be sure to remind your nephew that his new car will need insurance and he’ll need to budget that into his monthly costs of car ownership.
You and your nephew can shop for car insurance using the free Jerry app. Jerry can help you find affordable rates hassle-free!”
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