You should never cosign on a loan. This is one of the most dangerous things you can do. Generally people only need cosigners if they have had a negative credit history. This means they have had problems paying their bills on time. When you consign on a loan, you are telling the bank that you will be responsible for paying the money if the other person does not. It does not matter if it is your best friend, your boyfriend, your sister or your mother, do not do it. It can strain your relationship and you may end up ruining your credit history.
If you have already cosigned on a loan, then you are legally responsible to pay the money back. You may ask the person to try to refinance the loan without your name being attached, but this is only possible before they have stopped making payments. You should begin saving money so that you are prepared if you do need to begin making payments on the loan. You will likely not be contacted until the payments have not been made for a few months. You should work with the bank to have any collateral returned to the bank. Then you will need to work on paying back the money.
If you are approached to cosign, simply say no. If you want to help, find another way to do it. You may sit down and help them set up a budget. You may have money that you can give that person to help him out or you may simply say no. Once you are married, you should realize that you should cosign most loans. In some states you can be held legally responsible for the debt you or your spouse accumulates during your marriage. However before you get married you will not be held responsible.
