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co-signing

Q&A: Co-signing a grandchild’s student loan

July 18, 2016 By Liz Weston

Dear Liz: My granddaughter, who will graduate college in a year, has asked me to co-sign her third private loan, which will bring her total debt to $30,000. She needs three people to co-sign. Her parents and the other grandparents have agreed and she wants me to be the third party. I love my granddaughter and trust her intentions, but I really don’t like co-signing a loan for anyone. If I refuse, I’ll really be in the doghouse. Is there any way I could guarantee that I would only be responsible for this loan if the others don’t pay?

Answer: Co-signers are equally responsible for paying a debt. There isn’t a hierarchy. If your granddaughter fails to pay a loan, it will affect the credit reports and credit scores of anyone who co-signed that loan.

It would be unusual for any student loan to require three co-signers. What she may have meant is that her parents co-signed her first loan, her other grandparents co-signed the second and now she wants you to co-sign the third.

In any case, there’s no way to get the guarantee you want. If you’re not comfortable co-signing, don’t. Your family members should be the ones in the doghouse if they pressure you in any way to go along with this scheme.

Filed Under: Q&A, Student Loans Tagged With: co-signing, q&a, Student Loans

Friday’s need-to-know money news

July 24, 2015 By Liz Weston

co-signer-penToday’s top story: How to keep your identity secure. Also in the news: Automating your way to wealth, what you need to consider before becoming a co-signer, and what to tell your grandkids about saving for retirement.

Keep Your Identity Secure With a Credit Freeze or Fraud Alert
Protecting your important assets.

How to Automate Your Way to Wealth
Putting technology to work for you.

Stop. Drop. And Read This Before Becoming a Co-signer.
Consider the long-term impact.

6 things to tell your grandkids about saving for retirement
Get them on the right path early.

Filed Under: Liz's Blog Tagged With: automation, co-signing, Identity Theft, Retirement, retirement savings

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