First-time borrowers often find it difficult to get a loan. Even if they are not considered a risk due to poor credit rating they are often asked to find a co-signer. This is an easy way for the lender to minimize risk.
As a co-signer you need to be careful. How well do you know the borrower? Are you sure he will be able to make the payments? And in a worst case scenario can you afford the debt if he defaults on the loan?
In a way you are being asked to take a significant risk that a finance company is not willing to take.
If the lender sues to collect, you may end up paying attorneys' fees, and if he wins the suit, your wages could be garnished.
You could even lose your car or you house!
Do you realize that the loan can affect your ability to get financing as well?
You should take adequate measures to protect yourself. At the very least have the lender put in writing that he will advise you of any delays in payements.
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