Cosigning a Loan: Don’t Do It.

If there is one golden rule for personal finance, it is this: never cosign a loan.  No good can come of it.  Just yesterday I was waiting for a cab at UBS Tower in downtown Chicago (a long cab wait day, ugh).  I overheard what appeared to be two 20-something friends discussing missed payments on a co-signed auto loan.  It was a heated discussion: one (Larry the Lender) had cosigned the loan for the other (Dan the Debtor).  Dan had missed payments.  Larry knew nothing of it, and the creditor started harassing Larry for back payments.  Meanwhile, Larry’s own good credit was in jeopardy.  So here Larry had done a good deed, and it was costing him not only his credit worthiness, but the friendship as well.

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