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What is your financial risk if you cosign a car loan for your grandson?
Wiki User
∙ 18y ago
The financial risk for any co-signer is HUGE! Co-signing a loan makes you 100% liable for the debt. If your grandson pays the loan late, or defaults on the debt, those "bad marks" impact your credit equally. The only time a consumer buys a car is when they pay for one with cash. When a consumer obtains a car loan, they are borrowing MONEY that is secured by a car. Big difference! If something happens to that car, the lender still wants their money. This is why financers force borrowers to keep the vehicle fully insured for the term of the loan. They know that most consumers don't understand this concept and think that if the car is repossessed, or wrecked, or stolen, that they no longer have to repay the loan. This is a misconception. Lenders extend a certain amount of money, secured by the vehicle, at a specific interest rate and they want every penny of that money back. This is what you would be agreeing to, should your grandson default on this loan. If a professional lender, who makes his living by extending credit to borrowers, refuses to lend to your grandson because the risk is too high; why is the risk acceptable to you?
Wiki User
∙ 18y ago
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What problems would arise without financial intermediation?
The amount to loan Duration or maturity of loan Attitudes toward risk
Do you need a credit card to have credit?
No you can build credit by taking out a loan and paying it back ON TIME. Or have someone cosign a loan for you in order to get approved for a card or loan but make sure the cosigner fully understands the agreement because they'll take on most of the risk.
If you already have a car loan out can you cosign for a friends car loan?
Yes you can be a cosigner if your credit is approved by the lender. Also, you should be certain you can afford to make the car payments in case the primary borrower fails to pay. You will be held equally responsible for paying the loan. In most cases where someone needs a co-signer, their credit is not up to speed, and the risk that they will not pay is passed to you. Think twice about getting entangled in their financial situation.
When was Financial Risk Manager created?
Financial Risk Manager was created in 1997.
What do home equity loan rates do?
Home equity loan rates are second or third mortgage. The loan rates are based on loan risk. The bank sets higher rates for higher risk borrowers and lower rates for lower risk borrowers.
Do you need a credit card to have credit?
No you can build credit by taking out a loan and paying it back ON TIME. Or have someone cosign a loan for you in order to get approved for a card or loan but make sure the cosigner fully understands the agreement because they'll take on most of the risk.
What problems would arise without financial intermediation?
The amount to loan Duration or maturity of loan Attitudes toward risk
If you already have a car loan out can you cosign for a friends car loan?
Yes you can be a cosigner if your credit is approved by the lender. Also, you should be certain you can afford to make the car payments in case the primary borrower fails to pay. You will be held equally responsible for paying the loan. In most cases where someone needs a co-signer, their credit is not up to speed, and the risk that they will not pay is passed to you. Think twice about getting entangled in their financial situation.
How can I get out of a cosigning loan that is still active?
Chances are you will not be able to remove yourself from responsibility for any loan you cosign until the loan is paid in full. Remember, the borrower needed you to cosign because he didn't have credit, or had bad credit and was not considered by the lender to be a suitable risk. By cosigning, you are actually taking full responsibility for repaying the loan. There are a few situations where a lender may agree to remove you as cosigner if records indicate that payments have been made on time for a period of
If I bought a car with a co signer do I have to have to co signers consent to sale or trade the car?
No if the cosigner is not list on the title. However you cannot sell the car until the loan is paid off and you get a lien release. The person was good enough to cosign the loan for you taking a big risk so you should be good enough to discuss this with that person.
What are Asset Quality Ratios?
Asset quality ratios determines the quality of loans of a financial institution. If the ratio is high the more at risk the loans are. The lower the ratio, the less likely the loan would be at risk.
What happens with lehman brothers holdings inc 1-31-38 medium term notes ser 1?
•IF ANY FINANCIAL INSTITUTION TAKE LOAN BEYOND ITS CAPACITY(MEANS ITS LOAN AND ITS INVESTMENT ACCOUNT EXCEED ITS CAPITAL) THEN CONDITIO MAY BECOME UNCTOLLED. • •UNSECURED LOAN AND INVESTMENT CREAT MUCH RISK FOR THE FINANCIAL INSTITUTION.
When was Financial Risk Manager created?
Financial Risk Manager was created in 1997.
How does an FHA loan differ from a standard loan?
The Federal Housing Administration provides a loan guarantee program in lieu of private mortgage insurance so qualified borrowers can get a mortgage loan with a low down payment. The FHA doesn't lend you the money, they guarantee the loan, so the lender doesn't take on a financial risk by extending you credit
What do home equity loan rates do?
Home equity loan rates are second or third mortgage. The loan rates are based on loan risk. The bank sets higher rates for higher risk borrowers and lower rates for lower risk borrowers.
What conditions led to calls for central coordination of financial management functions?
The savings and loan crisis had developed undetected, financial scandals had occurred in the Department of Housing and Urban Development, numerous high-risk programs had been identified
What would increase the risk of a loan?
Risk of loan can be increased by your budget for instance not having proper and effective budget planning
