Anyloan Australia :: Articles

Co-Signing Loans - Risky Business

Co-Signing Loans - Risky Business

There may come a time in your life when you are asked to co-sign for a loan or credit card.
If this is the case, there are several things to consider before making a final decision.
Technically, you are putting yourself at risk of damaging your own credit in the event that the loan goes unpaid.

The vast majority of individuals, seeking a co-signer fully intend to make timely payments. Unfortunately, good intentions are sometimes interrupted by unforeseen problems and situations.

Your Credit Rating

Typically, when you co-sign a loan it makes it more difficult to get credit yourself.

This is because lenders take into consideration the cosigned loan, when figuring out your debt ratio.

Depending on the size of the loan, it could very well put you over your limit.  If you are asked to co-sign a loan with an open line of credit, consider it very carefully before making any decision.

No Control

Farm Equipment Finance and Loans
Looking for the best way to finance your Farm Equipment? Well, look no further! Simply submit our 2-minute business loan enquiry form ... and we'll help get you qualified for the best rate Plant and Equipment loan available from our national panel of independent business finance brokers. We also have access to the best rates and options for Business Cashflow finance for Farmers.

As the cosigner you will have no way of controlling the spending habits of the individual who will be making the purchases.

They could easily tell you they will only be spending $1000 when in reality they spend 10 times that much.

There are certain lenders who will agree to initially freezing a line of credit, if it is requested.

In this case scenario, there is less risk involved. In many cases cosigners are not notified until the loan actually defaults.

This obviously causes a problem, because it may be too late to rectify the situation.

It is wise to ask the lender if you will receive a duplicate statement or be given the ability to check payment status by phone.

If the answer is no, think twice before signing on the dotted line.

Before you Commit

Unfortunately, individuals who require a cosigner either have no credit or bad credit.

Although those with no credit history are probably more apt to make timely payments, there is still no way to be sure.

Individuals with bad credit may be prone to the same habits that resulted in a bad credit rating, in the first place.

When it comes right down to it, cosigning a loan is risky business, no matter how close you are to the borrower.

Before you commit yourself it is important to ask yourself if you can pay when your friend can't.

Debt Stressed?
If you're struggling to pay your debts as well as covering living expenses, we are here to help. Through our national panel of Debt Management specialists, we can help customers with $10k or more in debt by consolidating your existing loans, stopping Debt collectors from contacting you and re-negotiating repayments on your terms!
Free Super Advice
If you're thinking about rolling over or consolidating your super accounts, need investment advice, help setting up or administering a self-managed fund, we can help save you time and money. Our national panel of Superannuation Specialists are standing by, ready for your questions!


Finance Articles
Double your Home Loan Deposit in half the time
Saving is never an easy thing to do and saving for a deposit on a home is twice as hard. However, with the right strategy in place, your savings can grow and grow, cutting the waiting time to your own home in half. - read more
Car Leasing
Leasing is an often misunderstood car financing option so, in response to subscriber feedback, we've included this article to help give you a better understanding of what it is and how it works. - read more
Simple Tips On Getting Your Loan
So, you want to get a loan? Here are some simple tips that might help you make more informed decisions about the type of loan you buy, and from whom. - read more
Co-Signing Loans - Risky Business
There may come a time in your life when you are asked to co-sign for a loan or credit card. If this is the case, there are several things to consider before making a final decision. Technically, you are putting yourself at risk of damaging your own credit in the event that the loan goes unpaid. - read more
When should I use a personal loan?
Unsecured personal loans can really help in a pinch. If your savings are low and your car breaks down, for example, such a loan can patch up your life. Or maybe you're buying a big-ticket item and you need backup money to cover a short-term hole in your bank account. - read more
Balloon Payment Loans: 6 steps to make the loan profitable
Did you know that you can reduce the monthly payments on a loan to half of what they should be by using a balloon payment? Handled correctly, structuring your loan to include a Balloon Payment will increase your bottom line. Mishandled, a Balloon Payment can cause real headaches. Here are 6 steps to keep it smart. - read more
Loan Finance: How to Shop Around Without Damaging Your Credit
If you are considering taking out a loan, you wouldn’t go out of your way to make it harder on yourself to get approved or to get a good interest rate, would you? Yet many loan applicants would enjoy a considerably better outcome on their loan application if they followed this important rule. - read more
Five Worst Credit Card Mistakes
Credit cards can be an excellent way to manage your finances ... they can even be an investment tool. However your credit card can quickly become your enemy if not used correctly. Here are five of the worst mistakes most credit card holders make. If you can avoid these mistakes, you will benefit greatly. - read more
Why Payday Lending Enhances Consumer Welfare
Today, We’ll defy the critics and demonstrate why consumer welfare is enhanced within a competitive payday-lending environment. - read more
Credit Card Secret Guarantee
Most people use credit cards in some form or another but few truly appreciate one of the special features of credit cards that make using their credit card to insure their purchases. - read more

Finance News

Personal Loans to help Australians in need: FSO
Oct 29 :: As Australia prepares to clean up following devastating fires and floods, Financial Services Online CEO, Andrew Clark,... read more

Small business loans to help Aussie businesses through tough times
Nov 27 :: Financial Services Online has today announced a new credit facility for Australian business customers who are seeking loans... read more

Police issue warning about bank scam
Nov 20 :: Melbourne police are warning people about a scam in which fraudsters pose as bankers and ask for money.They say... read more

ANZ nets solid profit despite wealth management
Oct 26 :: ANZ banking group has reported a solid full-year result with net profit attributable to shareholders up 6 per cent to nearly... read more

Millions lack access to basic financial services
Jun 01 :: Nearly 3 million Australians do not have access to basic financial products such as a credit card, car insurance or even... read more

Reserve Bank leaves interest rates steady
Apr 04 :: The board of the Reserve Bank of Australia has left interest rates unchanged at 4.25 per cent at its monthly meeting today,... read more

Big banks not too profitable: RBA
Feb 25 :: The governor of the Reserve Bank says the Australian banking sector is not too profitable.Appearing before the... read more

Commonwealth Bank changes ads following ASIC concern
Jan 16 :: The Commonwealth Bank of Australia has agreed to change some of its advertised loan comparison rates after concerns... read more

Inflation fall strengthens case for rate cuts
Dec 06 :: A leading unofficial measure of inflation eased last month due to falling food and fuel prices, strengthening the case... read more

Reserve Bank cuts domestic growth outlook
Nov 07 :: The Reserve Bank of Australia (RBA) has cut its forecast for economic growth and inflation in its latest quarterly report... read more


Need Help Finding a Loan?
Find out now if you qualify and compare rates, offers and options from multiple lenders - without a credit check!
Loan Amount:
Postcode:
All finance quotes are provided free (via our secure server) and without obligation.
We respect your privacy.

Knowledgebase
Mortgage Document:
The physical contract agreement that a Mortgagee (lender) enters into with a Mortgagor (borrower) outlining the precice terms of a mortgage loan.


Quick Links: | Compare Loans | Bad Credit Loans | Finance For Self-employed | Low Rates | Free Loan Assessment