Can a young person cosign a loan?

Answer 1

Yes, someone 18 or over can cosign on a loan. But you are legally liable for the entire amount if the borrower fails to repay---and it can ruin your own credit!! Think long and hard before doing this for anyone. I can't imagine doing this for anyone but a close relative...and even then there is no guarantee you won't end up paying the entire amount.

Past the need for being of legal age to contract, BY FEDERAL LAW AGE CANNOT BE A CONSIDERATION for granting credit. (That is one reason why people can get a mortgage at an advanced age, even though they will likely not live to see the loan through).

The credit scores are not combined or added to get to the needed level for a loan, in fact, just the need for a cosigner may raise the level required by the lender to approve a loan.

But the real consideration is:

You are certainly responsible for the actions of primary to the extent of the loan....and after that, it would be situational on what other liability could extend to you - but certainly situations no one would want to be in!

A cosigner is only needed because the primary doesn't have adequate credit rating/history for the needed loan.

Hence, the cosigner needs to have credit good enough to qualify for the loan, and secure enough that they can risk much of what they have historically established for likely no real benefit - on someone others won't risk anything for even with a possible very good business gain.

Understand, being a cosigner is essentially the exact same as getting a loan - the cosigner is just as liable as if he got the loan on his own..in fact he needs to be more responsible. He now has to take on the obligations of the primary too, if needed, likely without the control, posession or benefit of what was purchased.

Which is to say, if someone buys something for themselves, on their own credit, and then loses their job (or whatever) and has problems paying, they can sell the item and pay off (all/much of) the obligation. For many reasons, a cosigner may not be able to.

And let me be clear, it is frequently shown that people who are irresponsible about their own credit (regardless of why it got that way) are even more irresponsible about others credit and obligations -- and this extends to obligations like those that come with owning/maintaining things. Things that may have your name connected to them.

Sure you can cosign a loan if your ready to ruin your life at an early age. Remember relationships with people whether family or not tend to change.

There are certain criteria that you must meet. You must be 18 or older, you must have an acceptable credit background (no late payments, no high borrowing) and you must meet the acceptable amount of income which can vary depending on the bank and the type of loan. You won't find many young adults that have these, so it's generally not a good idea. Furthermore, someone older may have a better established credit history, which would lower the APR on the loan, lowering the payments as well.