I think it's a bad idea to co-sign a loan with a family member or close friend. If you want to help your child buy his first car, you may need to co-sign because the child doesn't have a credit history yet. The risk is that if your son misses a payment, the bank will come to you to pay it. Think carefully about who you co-sign for. I will never co-sign for a friend or family member because there is a chance that they could hurt my credit.
It's an assignment, not homework.
Read the following documents and make sure you understand every clause. There are good risks and bad ones. Make sure you know how to take calculated risks.
- Credit card contracts and bills
- Do you buy or rent a car?
- Insurance contracts
- Home mortgage (s)
Find out the answers to the following:
Do I understand how this agreement works?
Do I know how much risk I'm taking when I sign this contract?
Do I know about the tax laws that apply to the contract?
Does the contract match what I want? Don't worry about whether you think you deserve it (you probably do), just think about whether you can afford it.
Can I afford to lose all of my money or part of it if I sign this contract?
