Moms and dads out there, you may not think twice when your kid asks you to help them with a loan for a new car, or maybe a new apartment, but according to a new report, you probably should. Seems there’s a good chance that when you co-sign that loan for your kids, you’ll wind up opening up your wallet to pay for some of it, if not all of it.
According to a new survey by CreditCards.com, about one in six people have either co-signed a loan or credit card for someone else, with 38% of co-signers forced to pay some or all of that bill because the actual borrower failed to keep up their end of the deal. Because of this, 28% of folks saw a drop in their credit score, and 26% said the experience damaged their relationship with the person they signed for.
And that last one could be a big issue, since chances are you were probably pretty close to the person you co-signed for it to begin with. In fact, 45% of people have co-signed a loan for a child or stepchild, while 21% have signed for a friend, 14% have co-signed for a spouse/partner, 7% for a parent, and 6% have signed for either a grandchild, brother or sister, or boyfriend/girlfriend.
Source: Yahoo Finance