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What are the logistics of co-signing a loan?
Old 01-08-2012, 06:02 PM   #1
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What are the logistics of co-signing a loan?

I know you all want to tell me not to do so, but don't bother.

I really do want to know what legalities are required, without my traveling cross country.

It's a student loan.

I repeat: don't waste your time telling me not to; we both have better things to do.
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Old 01-08-2012, 07:45 PM   #2
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I poked around on this site and learned the feds use the term "endorser" for a person who co-signs a loan for a student with adverse credit history.

https://studentloans.gov/myDirectLoan/index.action

It appears you would fill out this form that would accompany the student's own loan application and promissory note:

http://ifap.ed.gov/dpcletters/attachments/gen0114b.pdf

I have no direct experience with this type of loan, however, so I hope others will add more information.

If the loan is a "private" loan through a non-federal program, there will be a different form and procedure.
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Old 01-08-2012, 08:04 PM   #3
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I co-signed an auto loan with my sister-in-law some years ago. I basically signed the loan with her and was fully liable for paying the loan. This continued until she had it paid off. The loan never appeared on my credit report, however.
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Old 01-08-2012, 08:16 PM   #4
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Originally Posted by Khan View Post
I know you all want to tell me not to do so, but don't bother.

I really do want to know what legalities are required, without my traveling cross country.

It's a student loan.

I repeat: don't waste your time telling me not to; we both have better things to do.
Hi Khan, I think probably the only way to know the legalities is to read the specific loan documents and see what you would be agreeing to do. Will the person for whom you would be co-signing, or the originator of the loan, mail or fax you a copy of it? That would let you know the terms without traveling cross-country.

I won't try to talk you out of co-signing the loan, but I will definitely try to talk you out of signing anything that you haven't been allowed to read in advance!
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Old 01-08-2012, 08:33 PM   #5
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Look to the document you are signig for specific details. That is the agreement you will be party to and you should definitely read it and be familiar with it. If you want an attorney to review it and don't wantto pay a whole lot for doc review, you can sign up with one of the legal plans out there as they charge small amounts monthly and do doc review without further charges.
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Old 01-08-2012, 08:38 PM   #6
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Look to the document you are signig for specific details. That is the agreement you will be party to and you should definitely read it and be familiar with it. If you want an attorney to review it and don't wantto pay a whole lot for doc review, you can sign up with one of the legal plans out there as they charge small amounts monthly and do doc review without further charges.
Further info, for this or other legal stuff?
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Old 01-08-2012, 08:39 PM   #7
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Hi Khan, I think probably the only way to know the legalities is to read the specific loan documents and see what you would be agreeing to do. Will the person for whom you would be co-signing, or the originator of the loan, mail or fax you a copy of it? That would let you know the terms without traveling cross-country.

I won't try to talk you out of co-signing the loan, but I will definitely try to talk you out of signing anything that you haven't been allowed to read in advance!
I will definitely read all the stuff.
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Old 01-08-2012, 08:42 PM   #8
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Further info, for this or other legal stuff?
For the legal plans? I just signed up with ARAG through work, but they sell to individuals as well. I think they charge like $20 a month (Google 'em). There is also Pre Paid Legal, but they are a bit of a multi level marketing operation so you might have them humping your leg for years if you ever cancel.

Both services will provide a simple will and other final docs, review documents of up to 10 pages and send nasty letters on their letterhead for you at no extra charge.
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Old 01-09-2012, 03:44 PM   #9
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I co-signed a student loan for our son. He dropped out of school, failed to pay. I got stuck paying it. It also shows on the credit report. I'll say this they did not try very hard to get my son to start paying or even work out a plan. They called me almost ASAP (which is kind of good for credit report) and I took care of it. MTC
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Old 01-09-2012, 04:01 PM   #10
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Legally there is little difference between signing for a loan and co-signing for someone else. It's a promise to pay. The only physical difference on a student loan is you sign on the co-signer line instead of the first line.

That's the specific answer to your specific question. Besides all the terms of the loan, make sure you know how, and how soon, you would be notified if the payments are not made. Then be prepared to take over the payments.
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Old 01-09-2012, 08:17 PM   #11
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DW's sister asked us to cosign on a mortgage a few years back. I threw a fit. DW had no idea what she was doing and the problems it brings. The sale fell through anyway and saved us a bunch of trouble. In going through the process and paperwork, I asked how it could affect our credit rating and was told that it goes on your record just like you took out the mortgage yourself. Why? Because you are liable for it.
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Old 01-10-2012, 09:10 AM   #12
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I/DW co-signed twice for our adult (disabled) son. When he got his degree and needed a car for his first j*b, and currently, to "certifiy" his apartment lease (he's low income - it's a long story).

In both cases, we looked at it as "can we afford to cover the obligation if he fails to meet his required commitments?"

He has, and continues to do so. We have no regrets.

However, if his failure to live up to his commitments impacted my/DW's plans (current/future), it would be a different story.
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Old 01-10-2012, 01:54 PM   #13
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Further info, for this or other legal stuff?
This one meets my needs well.
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Unfortunately, it's a group plan, mostly offered by employers.
I get it through my membership in the Air Force Association (which anyone can join), but you have to be enrolled by December to be covered for the following calendar year. They're strict about that part, so it wouldn't do you any good now, but you might consider it for the future. I like it.

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Cost is $211.80 per year total for you, your spouse and eligible dependents. Once you've paid the enrollment fee, you receive full representation for most of your personal legal needs throughout 2012.
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Old 01-10-2012, 02:20 PM   #14
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Logistics are, you fill any information they want so they can find you later and sign on the co-signer line. Legal obligations are that should the student default, you're liable for the loan until it's paid off or you become deceased. Bankruptcy does not discharge the loan. I've heard of grandparents who co-signed their grandchild's loan become responsible when after grandchild died. There are also cases where a kid's parents had bad credit, so they get a grandmother to co-sign and she ends up with the loan when the kid doesn't make the loan payments.
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