Your friend so happened to be applying for a loan gets disapproved. The bank or the lending company asked for someone to co-sign him for that loan application. The loan policies may not be as easy as you think. Most of the time, if the company happened to find out that you do not qualify in it you will be denied. In order to help you get through that you will be asked to find a co-signer or the other way around, you will be asked to co-sign on behalf of the borrower. Indeed, cosigning is a very generous act. You get to help a person towards the approval of his loan application. Nonetheless, you should bear it in mind that becoming a cosigner entails some responsibilities and as well as accountability. Here are the things that you need to know on becoming a loan cosigner.

Disclosing Personal Information

To the best of your knowledge, as part of being a cosigner you also have to disclose some personal information especially when it comes about your credit standing. The company needs to check on your credit reputation as to whether you have a good or a bad one. The approval of the loan may also be dependent upon the co-signer\’s credibility. This is because becoming a cosigner would also equate to being capable of paying the loan in any case that the borrower is no longer capable of paying it. Thus, the cosigner must really figure this out carefully before entering in to such agreement. The interest rate of the loan has also something to do with the co-signers capacity.

Loan Updates

In most cases, the cosigner is seemingly unaware of the loan standing as to it is being paid up to date or the outstanding balance remained unpaid for a period of time. Part of responsible cosigning, the bank or the lender also updates the cosigner of the loan payments or the loan standing as a whole. This is in order for both parties to keep track of the loan.

Weighing Circumstances

It is true that this is an act of generosity. However, this can affect the relationship of the borrower and the cosigner whatever may be the outcome of the loan. Most of the time, money matters can ruin relationships between friends and family members. So, being a responsible co-signer you should try to weigh the circumstances. You should not right away bend over to the request of the borrower. It is wise if you first get to know the purpose of the loan application. If it\’s due to some stuffs that are well beyond ones control or it is something emergency in nature then that\’s the time that you lend a hand and volunteer yourself to cosign a loan. However, if it\’s something non-urgent then think it over. Remember, cosigning also affects your credit check.

Be Discreet

It is also very important that you stay tactful when you become a cosigner. When others may hear bout it, they would probably ask you to do the same thing for them and pretty sure you don\’t want that to happen. So, make your cosigning deal be a discreet one.

Author Bio: Willie Rhoades is a finance analyst who enjoys writing about UK loans and unsecured loans bad credit as well as other related topics.

Category: Finances
Keywords: loan application,loan policies,loan cosigner,loan updates