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Borrowers should use caution with online loan deals

On Behalf of | Nov 8, 2012 | Firm News, Loan Modification vs. Bankruptcy

Many in Florida know that the credit markets are fairly tight right now, and that borrowers with less than great credit are having a harder time securing loans for things like a small business or a new car. For many, this can be circumvented by getting a cosigner who has a better recent credit history to help them secure the loan. For those without willing friends or family, this can be difficult. As a result some are turning to strangers to help secure the loan, in exchange for a cash payment.

One young man told reporters that he is trying to use Craigslist, the free online classified ad site, to find a cosigner for a private student loan. The man is working on a nursing degree and needs to stay enrolled in school in order to keep his student visa and stay in the United States. Still, his situation is cause for concern for financial experts.

It’s important to remember that even if an arrangement like that works out, and the borrower doesn’t become the victim of fraud, they have still taken out a loan for which they are not qualified. At the same time, the cosigner is also at risk because they have secured a loan for someone who may not be able to afford it and could end up on the hook for the full amount.

Before going to extreme measures like finding a stranger to cosign on a loan, Florida borrowers should get a full picture of their finances and figure out why they are not able to get the loan on their own. For those who are struggling with a lot of debt already and not enough income, a better solution could be restructuring through bankruptcy.

Source: CNN, “Desperately seeking co-signers – on Craigslist,” Blake Ellis, Nov. 8, 2012.

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