9. Make an agreement with the lender in writing to send you a notification if the borrower misses a payment. This is in order to give you time to deal with the problem or make back payments without having to repay the whole amount immediately.

 

10. Be careful in pledging your property and valuable items like jewelry, cars or heirlooms just to secure the loan because most of the of the time, if the borrower defaults, you could lose these possessions. If possible, try to exclude these possessions from your contractual obligation.

 

Cosigning for a loan often means substituting your finances for that of the borrower's. If something goes wrong, it can severely affect your savings and your credit. It is a good idea to cosign a loan only if your finances are more than capable of handling it, otherwise your own finances and credit report could take a hit.    

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