Should you cosign for someone who needs help on a loan? This can be a very challenging question and it depends on your personal expectations. It's extremely important to know that if the borrower (your friend, family member, significant other, child, whoever) misses payments, your credit score will take a plunge. Not only can it affect your credit score, but the lender can also come after you for the money, and it will likely destroy your relationship with that person. It's likely that if the bank is requiring a cosigner, the bank doesn’t trust the person to make the payments. The best rule of thumb in deciding to cosign for someone or even lend someone money, is to assume that it's a gift and that you'll be on the hook for the entire amount. If you go in with this expectation, you won't be disappointed if that is the end result. **Bonus tip for parents: If you’re asked to cosign a private loan for your college student (Parent Plus Loans and such), first check to see if your kid has maxed out federal loan, grant, and scholarship options before exploring other loans.
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