Student Loans: Read the Fine Print on Co-Signers

http://articles.latimes.com/2014/apr/22/business/la-fi-mo-student-loan-defaults-cosigner-20140422

The federal consumer agency is now warning student loan borrowers to be aware that in the event that their co-signer passes away or files for bankruptcy, the lender can automatically (and without warning) require the borrower to pay the full amount immediately.

These private lenders say that this is completely within legal bounds but the federal consumer agency is warning borrowers to read closely each private lender’s co-signer release and other benefit information before taking out the loan; to avoid being Student Loan Applicationblindsided by loan defaults. The LA Times article says, “The automatic defaults triggered by a co-signer’s death or bankruptcy have the potential to harm a borrower’s credit rating, making it difficult to pass employment screenings or access other forms of credit.” This is why we think it is very important for all potential borrowers to be aware of the dangers of student loans, and the affects they could have on you in the future.

Comments Off on Student Loans: Read the Fine Print on Co-Signers