ramifications of cosigning a loan.
Recently DBF cosigned a loan for a family member, at his bank. It is what you would call, an unsecured loan, as there is nothing being used as collateral.
When the bank checked DBF's credit report, she said, "Wow, that is the second highest one I've ever seen."
He believes the family member is making the payments on time, and hopes she is even paying them early, and even paying some extra.
In the event she messes up (late payments)at what point can it affect his credit? If they come after him for late or missed payments, will it be too late? He is very aware that he is responsible if she does not pay.
He thought about calling the bank and finding out just how she is doing on it. Can he do that?
He is a little uncomfortable with just getting a reply of "I'm paying it", if there was any chance of how she was paying it being able to affect my record. He doesn't want to be constantly asking for proof or anything like that.
The loan is set up for 3 years, and a lot can happen in 3 years. He believes she is good for it, but just a bit concerned that she may not realize just how important making payments on time are...that and maybe making some payment 'ahead', or saving for making some emergency payments, in case she is unemployed. She is young and starting out in the working world, is a temp employee, and has had no responsible fiscal upbringing whatsoever.
Is there anything he can do to put his mind more at ease for the next 2 1/2 years (the remainder of the loan)? He is wanting to help her establish some good credit, as she has nothing but a school loan which got delinquent, but he doesn't even know whose name was on that.
DBF does not want to pry or appear distrustful, and does not want to appear to be 'in her business'. If I had signed, it would have been known up front that I would be in her business...just a small price to have a cosigner with good credit, getting a good interest rate.
Sue... who doesn't know when to use affect or effect