BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The cosigner is agreeing to pay half of the loan
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The cosigner is required to deposit the amount of the loan into a special bank account until the loan is paid in full.
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If the borrower defaults on the loan, the lender will expect to receive full payments from the cosigner.
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Detailed explanation-1: -It could limit your borrowing power. Potential creditors decide whether or not to lend you money by looking at your existing debt-to-income ratio. Depending on how much debt you already have, the addition of the cosigned loan on your credit reports may make it look like you have more debt than you can handle.
Detailed explanation-2: -Yes, being a cosigner on a car loan will help you build your credit history. The primary loan holder and cosigner share equal responsibility for the debt, and the loan will appear on both your credit report and hers.
Detailed explanation-3: -Reasons To Think Twice Before Cosigning for a Loan Potential risks include: Damage to your credit score, which could impact your future ability to get loans or credit cards. Debt collection activities, including being sued by the lender. Negative impact on your personal financial situation.
Detailed explanation-4: -Before you pledge property to secure the loan, like your car, furniture, or jewelry, make sure you understand the consequences. If the borrower defaults, you could lose them. Generally, lenders want to see a cosigner with high credit score, a clean credit report, and a long history of consistent, on-time payments.