I don't have great credit, so I've asked a family memeber to co-sign for a small business loan. What are the responsibilities of this co-signer? Are there other options for obtaining a loan without using a co-signer?
Thanks SO much!
2007-06-21 04:10:13 · 8 answers · asked by E S 1 in Business & Finance ➔ Small Business
A co-signer is on the loan with you. So, they have to pay if you don't and it is reported to the credit world as if they are on the hook for a loan.
On the other hand, a Personal Guarantee still puts them on the hook if you don't pay, but isn't reported to the world that they are committed.
So the later doesn't show up on a credit report that they are committed, like a co-signer would. Mind you, they are ethically required to list it as an obligation.
2007-06-21 04:17:04 · answer #1 · answered by playfulcoyote56 1 · 0⤊ 0⤋
The co-signer is just as responsible for paying back that loan as you are. If you don't pay the loan officer, they can come after the co-signer for payment. As for obtaining a loan without a co-signer, you really don't have much of an option whereas you stated you don't have great credit- that is probably why you need a co-signer.
2007-06-21 04:18:07 · answer #2 · answered by BB 3 · 0⤊ 0⤋
The co-signer is responsible for paying the loan if the debtor defaults. It's a pretty big responsibility for a family member since if you can't pay back the bank then they'll be forced to pay all the bills.
If you have bad credit it might be pretty difficult to get a loan without a co-signer, unless you have something you can put up for collateral, like a house.
2007-06-21 04:14:47 · answer #3 · answered by Laertes 1 · 0⤊ 0⤋
if the signer will not be able to pay the loan, the company which granted the loan will run after the co-signer
2007-06-21 04:15:10 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Co-signor assumes responsibility for the loan if the borrower doesn't pay. You literally become the borrower of record, but the true borrower gets credit for paying it.
2007-06-21 11:19:39 · answer #5 · answered by krazykyngekorny 4 · 0⤊ 0⤋
No one gives out SBA loans for such a small amount of money. Even if they did, YOU would need to have $1000-1500 in YOUR pocket before you would get a dime.
2016-05-21 11:37:28 · answer #6 · answered by ? 3 · 0⤊ 0⤋
The only responsibility is that they have to pay if you don't. Other options are collateral, line of credit (on the equity in any property you might have), etc.
2007-06-21 04:15:07 · answer #7 · answered by jdkilp 7 · 0⤊ 0⤋
Co-signor pays the loan if you default.
2007-06-21 04:12:58 · answer #8 · answered by Ronin 4 · 0⤊ 0⤋