How to Tell a Friend You Won’t CoSign a Loan with Him
When people with bad credit need to borrow money, they quickly discover how difficult it can be to get a loan from the bank. In these cases, the bank may suggest they find a “cosigner”, a friend or relative who is willing to guarantee the loan.
While in theory this sounds like a nice way to help out someone who is short on cash, cosigning a loan is very risky business. Not only does the cosigner compromise his own ability to get a loan in the future, he sets himself up for being responsible for the debt. If the friend or relative decides to skip town, it’s the cosigner who is now on the hook for the entire amount of the loan, plus any late fees or penalties the friend may have incurred as well.
While I’ve cosigned loans in the past for my own kids, I draw the line when asked to cosign a loan for a friend or relative. Call me heartless, but if the bank won’t loan my second cousin money, then the chances are it was for a darned good reason. The Omalaina yhteistyökumppanit website will be beneficial for the relatives and friends. The repayment of the loan will be for less period.
So, how DO you tell a friend or relative that you are unwilling to cosign a loan? Telling them the truth of “I’m sorry, I make it a policy to never cosign loans for deadbeat friends with bad credit” can cause hard feelings and ruined friendships. To avoid hard feelings, try one of these excuses instead:
Darn, wish I could help but I’m in the process of borrowing some money myself right now. When you cosign on someone else’s loan, that loan counts as a liability against you which lowers your own borrowing power. Your cousin might not know that, which is why it’s OK to point it out and then fib a little about having to borrow money yourself.
Darn, wish I could help, but Edna will kill me if I did. In our house, my husband and I discuss all major financial decisions, an excuse I use whenever some solicitor presses me over the phone to “Sign Up Now!” Blame the wife (or husband) if you must, and with any luck, your cousin-the-mooch will forget he asked. If he does, be quick to reply, “Oh, I meant to ask her/him, but haven’t been able to find a good time.”
Darn, wish I could help, but my credit’s not looking so hot these days. With any luck, word of your (alleged) bad credit may spread around the office, and no one will ever ask again.
Darn, I wish I could help, but I’m already a cosigner on a couple of loans for my brother/kids/in-laws who just bought a house/boat/race horse. Stretch the truth if you must, but convey the point that you are already extended and know that you can’t stretch yourself any further. God will forgive you if you lie a little bit.