While you want to help alleviate your child’s debt burden and make it easier on them, you’ll want to set boundaries and be aware of how co-signing a student loan could affect your financial well-being. Parents need to understand that a cosigner is essentially a co-borrower, explains Levy. In turn, they’re on the hook to repay the debt. The cosigned loan will affect the parent’s credit history, too, he says.
So if your child is late with a student debt payment or defaults, it will ruin not just your child’s credit score, but yours as well. (más…)