Should you co-sign a personal loan for a friend/family member? Why/why not?
"My thoughts on loaning money to friends or family are outlined pretty extensively here, but cosigning on a loan is a different matter.  It is almost never a good idea to do this (I say ""almost"" only because I dislike absolutes).  Here are the reasons why: Now, all that said, if my sister or parents were dying of cancer and cosigning a loan was the only way to cure them, I might consider cosigning on a loan with them, if that was the only option.  But, I would bet that 99.9% of such cases are not so dire, and your would-be co-borrower will survive with out the co-signing." "My personal rule is to not loan money (or co-sign) for any amount that I am not willing to give away.  It can go wrong in so many ways, and having a family or friend involved means making a ""business"" decision is difficult. If a bank won't loan the person the money, why should I?  Being a co-signer is the same as borrowing the money in my name and giving it right over to the borrower. There might be great reasons to do it.  I would probably sign a loan to keep my family alive or healthy, but no other reason.  There are many ways to help without signing a loan.  Give a room and a place to live, loan a car. The other thing is if you really truly believe in the borrower, it won't do long term damage to your credit or your financial goals, and you are the only resort; go ahead.  I am thinking about helping a teenager afford their first car or student loans." Yes, there are times when co-signing is the right choice. One is when you know more about the person than the loan issuer does. Consider a young person who has just started working in a volatile field, the kind of job where you can be told on Friday that you only get one shift next week but things might pick up the week after, and who makes maybe $12 an hour in that job. You've done the math and with 40 hour weeks they can easily afford the loan. Furthermore, you know this person well and you know that after a few weeks of not enough shifts, they've got the gumption to go out and find a second job or a different job that will give them 40 hours or more a week. And you know that they have some savings they could use to ensure that no payments will be missed even on low-wage weeks. You can cosign for this person, say for a car loan to get them a car they can drive to that job, knowing that they aren't going to walk away and just stop making the payments. The loan issuer doesn't know any of that.  Or consider a young person with poor credit but good income who has recently decided to get smart about money, has written out a budget and a plan to rehabilitate their credit, and who you know will work passionately to make every payment and get the credit score up to a place where they can buy a house or whatever their goal is. Again, you can cosign for this person to make that happen, because you know something the lender doesn't. Or consider a middle aged person who's had some very hard knocks: laid off in a plant closing perhaps, marriage failure, lost all their house equity when the market collapsed, that sort of thing. They have a chance to start over again somewhere else and you have a chance to help. Again you know this isn't someone who is going to mismanage their money and walk away from the payments and leave you holding the bag. If you would give the person the money anyway (say, a car for your newly graduated child) then cosigning instead gives them more of a sense of accomplishment, since they paid for it, and gives them a great credit rating too. If you would not give the person the entire loan amount, but would make their payments for many months or even a year (say, your brother's mortgage for the house where he lives with a sick wife and 3 small children), then cosigning is only making official what you would have done anyway.  Arrange with the borrower that if they can't make their payments any more, you will backstop them AND the item (car, house, whatever) is going up for sale to cover your losses. If you don't think you could enforce that just from the strength of the relationship, reconsider co-signing. Then sign what you need to sign and step away from it. It's their loan, not yours. You want them to pay it and to manage it and to leave you out of it until it's all paid off and they thank you for your help. If things go south, you will have to pay, and it may take a while for you to sell the item or otherwise stop the paying, so you do need to be very confident that the borrower is going to make every single payment on time. My point is just that you can have that confidence, based on personal knowledge of character, employment situation, savings and other resources, in a way that a lender really cannot. Never co-sign a loan for someone, especially family  Taking out a loan for yourself is bad enough, but co-signing a loan is just plain stupid. Think about it, if the bank is asking for a co-signer its because they are not very confident that the applicant is going to be paying back the loan. So why would you then step up and say I'll pay back the loan if they don't, make me a co-signer please. Here is a list of things that people never think about when they cosign a loan for somebody.  Now if you absolutely must co-sign a loan here is how I would do it. I, the co-signer would be the one who makes the payments to ensure that the loan was paid on time and I would be the one collecting the payment from the person who is getting the loan. Its a very simple way of preventing some of the worst situations that can arise and you should be willing to make the payments anyway after all thats what it means to cosign a loan. Your just turning things around and paying the loan upfront instead of paying after the applicant defaults and ruins every ones credit. (Source: user's own blog post Never co-sign a loan for someone, especially family) I know this question has a lot of answers already, but I feel the answers are phrased either strongly against, or mildly for, co-signing. What it amounts down to is that this is a personal choice. You cannot receive reliable information as to whether or not co-signing this loan is a good move due to lack of information. The person involved is going to know the person they would be co-signing for, and the people on this site will only have their own personal preferences of experiences to draw from. You know if they are reliable, if they will be able to pay off the loan without need for the banks to come after you.  This site can offer general theories, but I think it should be kept in mind that this is wholly a personal decision for the person involved, and them alone to make based on the facts that they know and we do not.
I think you're eligible for the tuition fee loan but not the maintenance loan. I think that SFE were suggesting that you'd be eligible under point 4 here 4: People with the right of permanent residence in the UK If you satisfy all the conditions under this category, you will be   eligible for full Student Support. To be eligible: (a) you have the right of permanent residence in the UK; and (b) you are ordinarily resident in England on the first day of the   first academic year of your course; and (c) you were ordinarily resident in the UK and Islands for three years   before the first day of the first academic year of the course; and (d) if your three-year residence in the UK and Islands was at any time   mainly for the purpose of receiving full-time education, you must have   been ordinarily resident in the UK or elsewhere in the EEA and/or   Switzerland immediately prior to the three-year period of ordinary   residence in the UK and Islands. It does not matter if you were in the   EEA and/or Switzerland mainly in order to receive full-time education   during this earlier period. Point (b) would be the reason for asking you to prove you were in England on 1 September, but since you were under three years old when you left the UK, you wouldn't satisfy point (c). You should be eligible for the tuition fee loan under point 2 2: EU nationals, and family If you satisfy all the conditions under this category only, you are   eligible only for a loan to pay your tuition fees. To be eligible: (a) on the first day of the first academic year of the course, you   must be:     a UK national; or a non-UK EU national who is in the UK as a   self-sufficient person or as a student; the relevant family member of   such a person above; and (b) you must have been ordinarily resident in the EEA and/or   Switzerland for three years before the first day of the first academic   year of the course; and (c) the main purpose for your residence in the EEA and/or Switzerland   must not have been to receive full-time education during any part of   the three year period. "I am not sure how anyone is answering this unless they know what the loan was for.  For instance if it is for a house you can put a lien on the house.  If it is for the car in most states you can take over ownership of it.   Point being is that you need to go after the asset.   If there is no asset you need to go after you ""friend"".  Again we need more specifics to determine the best course of action which could range from you suing and garnishing wages from your friend to going to small claims court.  Part of this process is also getting a hold of the lending institution.  By letting them know what is going on they may be able to help you - they are good at tracking people down for free. Also the lender may be able to give you options.  For example if it is for a car a bank may help you clear this out if you get the car back plus penalty.  If a car is not in the red on the loan and it is in good condition the bank turns a profit on the default.  If they can recover it for free they will be willing to work with you.  I worked in repo when younger and on more than a few occasions we had the cosigner helping.  It went down like this... Co-signer gets pissed like you and calls bank, bank works out a plan and tells cosigner to default, cosigner defaults, banks gives cosigner rights to repo vehicle, cosigner helps or actually repos vehicle, bank gets car back, bank inspects car, bank asks cosigner for X amount (sometimes nothing but not usually), cosigner pays X, bank does not hit cosigners credit, bank releases loan and sells car.  I am writing this like it is easy but it really requires that asset is still in good condition, that cosigner can get to the asset, and that the ""friend"" still is around and trusts cosigner.  I have seen more than a few cosigners promise to deliver and come up short and couple conspiring with the ""friend"".   I basically think most of the advice you have gotten so far is crap and you haven't provided enough info to give perfect advice.  Seeking a lawyer is a joke.  Going after a fleeing party could eat up 40-50 billable hours.  It isn't like you are suing a business or something.  The lawyer could cost as much as repaying the loan - and most lawyers will act like it is a snap of their fingers until they have bled you dry - just really unsound advice. For the most part I would suggest talking to the bank and defaulting but again need 100% of the details.   The other part is cosigning the loan.  Why the hell would you cosign a loan for a friend?  Most parents won't cosign a loan for their own kids.  And if you are cosigning a loan, you write up a simple contract and make the non-payment penalties extremely costly for your friend.  I have seen simple contracts that include 30% interests rates that were upheld by courts." "First of all you do not ""co-sign a car"". I assume what you mean by this is that you co-signed a loan, and the money was used to buy a car. Once you signed that loan YOU OWED THE MONEY. Once a loan exists, it exists, and you will owe the money until the loan is paid. If you do not want to owe the money, then you need to pay back the money you borrowed. You may not think ""you"" borrowed the money because the car went to someone else. THE BANK AND THE COURTS DO NOT CARE. All they care about is that YOU signed the loan, so as far as they are concerned YOU owe the money and you owe ALL of the money to the bank, and the only way to change that is to pay the money back." What can you do?  Pay the loan or face the debt collectors. The finance company don't care who now keeps the car, or who drives it.  There's money outstanding on the loan, and your signature on the loan form. That's why co-signing a loan for someone else so often ends in tears. Are you doing the right thing? Yes, paying back some of the expense of college is a great way to show your gratitude. Could your sister also pitch in a little to help pay the debt down? Will you get approved for a $30,000 unsecured loan? You don't mention your credit rating but that will have an effect obviously. You might consider visiting a credit union with your father and co-signing a loan since it is his debt that you are assuming. You might still want to write a loan for your dad to sign even if he isn't co-signed on a loan. This could protect you in case of his death if there are other assets to divide. If you are not approved for a loan, you could also simply join your dad in paying down the highest-rate cards first and have a loan agreement for him to pay back that money if/when it is possible. You've mentioned that you have no collateral. There aren't many options for loans with no collateral. Your dad's bank or a credit union might consider a debt consolidation loan with you as a co-signer. That's why I mentioned going to a credit union. Talking to a loan officer at a local financial institution will make it easier to get approved. If they see that you are taking responsible steps to pay off the debt, that reduces your credit risk. If you do get a debt consolidation loan, they will probably ask your dad to close some credit card accounts. Consolidation makes sense, if your friend has his act together and isn't going to run up more debt. Finding a lender will be tough. I'd suggest trying local credit unions, making sure first that there has been NO late or missed payments for 6-9 months. You need to talk to a human at a local lender who will give you informal guidance about what you need to approve, so you don't end up getting lots of declinations. If its more than $10k, it will be hard to get a loan like this from anyone. In that case, you need to focus on the smallest debts first, because your friend's cash flow is going to be pinched by making payments to multiple creditors. It's critical to pay all creditors on time for at least the minimum amount due.  The problem is, once you start paying things down, the creditors will start ratcheting down credit limits. When that happens, you're at greater risk for getting nabbed with fees and higher minimum payments, which may be considered a universal default by other lenders.  There isn't alot of detail here, but depending on income and the amount of debt, your friend should be prepared to file for Chapter 13 bankruptcy. Here's some advice: Never go into business with a friend. Thats a rule that's as old as time. It already seems to me that you're encountering some disparity issues financially. This is a bad idea, man. Stop now, while you still can! The desire to be debt free is smart; but I think the purpose of a large group is motivation and peer pressure.  Getting out of debt faster isn't going to work mathmatically.  (I can't reason a scenario where the group's collective power doesn't favor one individual in the group over another.) All of the following conditions must be met: If any single thing fails, or if anybody changes their mind about how they feel about paying another person's debt, this plan will breakdown quickly and get very ugly.  Please notice most of those items are emotions, which cannot be planned nor controlled. Bottom line:  Don't do it.  The risks are too high compared to the average reward.  If your family could pull it off, a better plan would be to sell a reality show about the magical family who never fights and always puts the good of the others before themselves. Everybody do a debt snowball individually but have an email group, weekly group call, regular family meeting, group chat session or dinner event where you encourage each other, talk about the success, failures and openly discuss everybody's situation.  This is called a support group and they can be more effective than doing it on your own. Go around the table and  This will require humility, patience and grace from the participating family.  It will rely on similar peer pressure to succeed as a single group, without all of the very real pitfalls and very real consequences of a individual failing in a big group.