If you have agreed to co-sign a loan for a friend or relative, there are two things you can do to minimize your risk. First, ask the lender to agree in writing to notify you if the borrower misses even one payment. That way, you can try to manage the situation before it snowballs. Second, ask if you can limit yourself to the value of the loan itself. That way you won't be held responsible for late charges or other collection fees. If the lender agrees to this, make sure you get that in writing as well.
|Jennifer Mathes, Ph.D.|