I have a friend age 34 who is in a year program who needed about $3,000 to pay tuition owing to graduate next month. He needed a co-signer for a loan so I assisted him but I hesitated to do it because I didn’t want to give my SSN and other info to the lending company. I worked hard for an entire year to get my credit score over 700 from below 600 and actually have enough savings now to get my apartment.
I got a notification that my credit score dipped to 612 because of the loan I cosigned on. My entire mind went blank for a while. My career is put on pause and now I can’t move to live in a comfortable place. I’m not mean. If a friend asks me for $100 and I have it, I’ll lend it to them because I want to help and see them succeed.
Now, questions are flashing through my mind like why didn’t he ask his relatives who he lives with. He drives, he could have continued to do UberEats in Manhattan to make money or work overnight at FreshDirect to make some extra cash. I made sacrifices to get my 4 year degree, that took me 6 years, on my own. Sometimes doing 3 part-time jobs at a time.
Living in NYC is expensive but he can’t be complacent. I want to instruct him to go out there and hustle without me being seen as a bad person. How can I do this?
How do I get someone to pay off a loan?
byu/SpinachMundane9275 inpersonalfinance
Posted by SpinachMundane9275
7 Comments
>I’m not mean. If a friend asks me for $100 and I have it, I’ll lend it to them because I want to help and see them succeed.
You also don’t have to light yourself on fire to keep others warm.
Lesson learned.
It’s not his loan. It’s also your loan.
It’s not just his loan. It’s your loan too. You can ask them to pay it off. They don’t have to. At the end of the day, you are responsible for it.
Ouch, you better pay to make that loan current and then sue your friend. Waiting for them to get their finances in order will torch your credit. Handle this yourself and then recoup later in court
It’s POSSIBLE that he’s not aware that by cosigning, you are equally responsible for the loan, and that him not paying it impacts your credit as well as his. Lots of people don’t actually understand that.
So, I would explain that to him, and explain that your credit has dropped because he hasn’t been paying/been paying late.
If he’s indifferent about it…well then he’s not much of a friend at all.
Think of this as a valuable lesson. If he doesn’t pay you are on the hook.
Never loan money you can’t afford to lose.
Never and I mean never cosign for anything unless you are prepared to pay it off.
Dave Ramsey wisely says that every loan needs to be considered a gift, and if they pay you back then you end up ahead. Talk to them as others have suggested, but you also need to make a plan and be prepared to pay it yourself.