Co-sign loan

[Anonymous]

What will happen if I cosign for a solar loan for 34,000 for the next 20 years? Will I be able to take out car loans? What will be affected? 

[Anonymous]

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@Anonymous wrote:

What will happen if I cosign for a solar loan for 34,000 for the next 20 years? Will I be able to take out car loans? What will be affected? 

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I would not cosign for anything especially that long. Anything could happen between now and 20 years. And if they ever default on that loan you will be affected too and you will have a hard time getting any kind of loans. 

[Anonymous]

Thank you for your input!! But will I be able to take out a car loan? Or any loan for that matter? That's my main concern. I was planning on taking out a car loan sometime this year. As long as they don't default will it be ok?

[Anonymous]

As long as your debt-to-income ratio including that co-signed loan supports the monthly cost of your new car purchase (or any other type of loan payment), then yes you can. If your income is low, depending on what other debts you have, you may run into a problem. It's all about the DTI.

I co-signed for my boyfriend's business loan as well as took out a separate 20k lending club loan fully in my name in order to consolidate my boyfriend's debt. I was still able to secure a new car loan for myself. Word of advice, though... never co-sign for a loan that you won't be able and willing to pay yourself in the event they can't make the payments. For my boyfriend's loans, he pays me each month and I personally make the payments for those debts with the lender. That way I know if it's getting paid and there are no suprises. It's never been a problem and I trust him completely, but I feel more comfortable doing it this way.

[Gunnar419]

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@Anonymous wrote:
Thank you for your input!! But will I be able to take out a car loan? Or any loan for that matter? That's my main concern. I was planning on taking out a car loan sometime this year. As long as they don't default will it be ok?

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Whether you can get other loans depends on your income and overall credit picture. But if you co-sign for this loan, it will be on your records for 20 years, with you considered to be fully liable for its repayment., so it will definitely affect you, whether or not the person you're co-signing for defaults.

Some general advice: Never. Cosign. Anything. For anybody. EVER. Just. Don't. Do it.

It's nearly always a bad idea to cosign, but particular red flags go up on this loan because of its duration, it's size, and the fact that it is for a solar power system. Solar power systems are becoming cheaper all the time. They're more fussy and fiddly to live with than most people realize and can require very expensive maintenance and upgrading.  There's a strong likelihood that someone installing a pricey solar power system now will at some point conclude that he/she got a crappy deal. Maybe the person you're signing for is a saint, but eventually almost anyone taking out a long term loan or signing a lease for an expensive solar system will conclude they've gotten a bad deal and want out of it.

[Anonymous]

I agree with the statement above me. Even if someone has every intention of paying it back the simple fact is....if something happens and they need to cut back on stuff that loan is going to be one of the first ones to not get paid...because let's face it...someone needs a house, utilities, food and a car more.

additionally if another adult CAN'T qualify for something on their own there is a reason for it. Why put your credit on the line expecting them to respect it when they didn't even respect their own?

Now onto the issue of debt to income ratio. There is a very big chance that this loan will prevent you from not only obtaining a car loan...but even in good standing it can prevent you from purchasing a home....DTI is the first thing that lenders...car and home....look at.

[Fox342]

Gunnar419 is correct.  NEVER, EVER cosign for ANYONE.  The reason they need a cosigner is because they are deemed unreliable by the bank.  Yes, there are people that have had good experiences that cosigned for someone...but there are more with bad experiences...and when they can't pay...even if it's not their "fault" such as job loss, etc....it becomes your bad experience (and your debt) too.

Fox

[joedtx]

Have to agree with the consensus of the others. Keep in mind you get all of the risk and no benefit keeping in mind that is is an extended period along with the reporting on your file it will signifigantly reduce your buying power for the next 20 years.

[Imhotrodcrazy]

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@Anonymous wrote:

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@Anonymous wrote:

What will happen if I cosign for a solar loan for 34,000 for the next 20 years? Will I be able to take out car loans? What will be affected? 

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I would not cosign for anything especially that long. Anything could happen between now and 20 years. And if they ever default on that loan you will be affected too and you will have a hard time getting any kind of loans. 

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+1

[Anonymous]

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@Anonymous wrote:

Word of advice, though... never co-sign for a loan that you won't be able and willing to pay yourself in the event they can't make the payments

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Awesome advice if you feel you absolutely must.

But there's also a ton of co-sign horror stories out there too.