Make us your home page
Instagram

Beware of co-signing on a loan for a family member

Michelle Singletary, personal finance columnist at the Washington Post, writes that she gets lots questions from readers that involve friends, families and finances. These focus on whether to co-sign a loan for a relative.

My daughter has to move. Her credit is bad, and she is having difficulty getting approved for an apartment. Should I co-sign? Moving back home is not an option.

Do not co-sign. I know you want to help. However, unless you are prepared to make her monthly rent payments, don't do it. If her credit is bad, this is an indication that some financial issues are there already. Maybe it's because she was irresponsible, maybe not (like she's lost a job). But in either case, don't link your finances with hers. Instead, help her explore various living options. Perhaps she can move in with a friend temporarily.

Our 28-year-old daughter is entering a master's program this fall and we anticipate she will require loans. My wife and I are in our early 60s and expect to retire in three to five years. Should we co-sign an educational loan for our daughter if we are asked?

Do not co-sign if you're asked and certainly don't offer. Co-signing means you are borrowing, too. You are not a backup borrower. And I would definitely not recommend it since you are so close to retiring — unless you have the money to pay the loans. And if you have the money to pay the loans, then just give it to her. (I don't believe in loaning money. It can get complicated and ugly.) It's not too late to encourage your daughter to work and save up to pay the cost of the program.

Beware of co-signing on a loan for a family member 07/11/14 [Last modified: Sunday, July 13, 2014 6:46pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Construction starts on USF medical school, the first piece of Tampa's Water Street project

    Health

    TAMPA — Dozens of workers in hard hats and boots were busy at work at the corner of South Meridian Avenue and Channelside Drive Wednesday morning, signaling the start of construction on the University of South Florida's new Morsani College of Medicine and Heart Institute.

    Construction is underway for the new Morsani College of Medicine and USF Health Heart Institute in downtown Tampa. This view is from atop Amalie Arena, where local officials gathered Wednesday to celebrate the first piece of what will be the new Water Street District. The USF building is expected to open in late 2019. [ALESSANDRA DA PRA  |   Times]
  2. Tampa Bay among top 25 metro areas with fastest growing economies

    Economic Development

    Tampa Bay had the 24th fastest growing economy among 382 metro areas in the country for 2016. According to an analysis by the U.S. Bureau of Economic Analysis, Tampa Bay's gross domestic product, or GDP, increased 4.2 percent from 2015 to 2016 to hit $126.2 billion.

    Tampa Bay had the 24th fastest growing economy in the country for 2016. Rentals were one of the areas that contributed to Tampa Bay's GDP growth. Pictured is attorney David Eaton in front of his rental home. 
[SCOTT KEELER | Times]
  3. Tampa Bay cools down to more moderate home price increases

    Real Estate

    The increase in home prices throughout much of the Tampa Bay area is definitely slowing from the torrid rate a year ago.

    This home close to Bayshore Boulevard in Tampa sold for $3.055 million in August, making it Hillsborough County's top sale of the month. [Courtesy of Bredt Cobitz]
  4. With successful jewelry line, Durant High alum Carley Ochs enjoys 'incredible ride'

    Business

    BRANDON

    As a child Carley Ochs played dress up, draped in her grandmother's furs.

    Founder Carley Ochs poses for a portrait in her Ford Bronco at the Bourbon & Boweties warehouse in Brandon, Fla. on September 19, 2017. Ochs is a Durant High and Florida State University graduate.
  5. At Menorah Manor, planning paid off during Irma

    Nursing Homes

    ST. PETERSBURG — Doris Rosenblatt and her husband, Frank, have lived in Florida all of their lives, so they know about hurricanes.

    Raisa Collins, 9, far left, works on a craft project as Certified Nursing Assistant Shuntal Anthony holds Cassidy Merrill, 1, while pouring glue for Quanniyah Brownlee, 9, right, at Menorah Manor in St. Petersburg on Sept. 15. To help keep its patients safe during Hurricane Irma, Menorah Manor allowed employees to shelter their families and pets at the nursing home and also offered daycare through the week. The facility was able to accommodate and feed everyone who weathered the storm there. [LARA CERRI   |   Times]