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Cosign a Loan
Cosigning for a car loan, student loan or mortgage? You should give careful thought and consideration to the "what if" situations before agreeing to cosign a loan.
The cosigner of a loan agrees to be responsible for a loan's repayment if the borrower defaults on the payments. With most cosigned loans, the lender can request payment from the cosigner at any time, whether or not the debtor is actually in default on the loan. This is in contrast to a guaranteed loan, where a lender can go after the guarantor only after the debtor has actually defaulted.
A cosigner will in most cases also be responsible for any late charges, penalties and legal fees associated with a default. The lender can:
- Sue you and get a judgment against you
- Make you disclose your assets, and
- In extreme cases, force the sale of property you own to pay the debt
In addition, if the debtor defaults, the lender will probably notify the credit bureaus, which can hurt your credit history and credit score. Current lenders can use this damaging information to raise your interest rates on existing balances. Future creditors will take the amount of the debt into consideration when determining how much money they're willing to loan you.
Consumer Law
Consumer protection is government regulation to protect the interests of consumers. The terms "consumer law" and "consumer protection law" refer to state and federal consumer protection and product safety statutes and regulations that restrict or prohibit deceptive trade practices such as the Consumer Protection Act. These laws cover many topics, such as credit repair, warranties, internet scams, food safety, and identify theft.
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