financial help

So a friend or even a relative has come to you explaining how they found this great car.  They tell you it has low mileage, ice cold air, runs smooth.  It has new tires, and for a three year old car the price is fantastic.

They go on and on about the car, how it is just what they were looking for.  They ask if you will come take a look at the car, take it for a test drive so you can give them your honest opinion about the great vehicle.

You are flattered that they value your opinion and are glad to take them up on the offer to help.  You look at the car and even agree it is in great shape and the price isn’t bad and mention that with a little bit of negotiating they price would be perfect.

Now that they have you agreeing with them about the car they mention that they have the down payment, and remind you about that new job they just got five months ago so making the payments will be not problem.  They finish that statement with a “but.”  Even though they have the down payment, and can make the payments, they don’t qualify for a loan and they ask if you would be willing to co-sign for them.   They give you every assurance that they can make the payments and that you would have nothing to worry about.  Can you help them out and just “give them a signature?”

Now, lets take a look at this.  They have the down payment, and income from a job of five months that will more than cover the monthly payments.  Why would they need a co-signer?  Simple, contrary to the surface indications that they can afford this car, the bank as proof that this person does not make payments on time or maybe not at all.  The bank considers this person too high a risk to lend them money without the guarantee, in the form of a signature, from someone who has a proven track record of making regular on time payments.  That way, when your friend or relative misses a payment or two, or three (and they will, otherwise they wouldn’t need the co-signer) the bank can and will count on you to cover the loan.

This concept of co-signing isn’t a new one.  For thousands of years people have been guaranteeing the loans of others and are then stuck holding the bag (paying off the loan)

It’s stupid to guarantee  someone’s loan. Proverbs 17:18

So if the concept of co-signing or guaranteeing has been something so bad and common that God felt it necessary to put a warning in the Bible about it, why would any one co-sign a loan for anything? After all, we have been warned it is “stupid.”

So since the Bible is what I consider “Basic Instructions Before Leaving Earth” and more importantly, God’s word, I would never co-sign a loan, regardless of amount, for anyone.

When a bank requires a co-signer they are stating “this person can’t manage money can’t be trusted with this money”

Are you mean, unloving or not a good friend if you don’t “help out” by co-signing? Actually you are just the opposite.  You are a person who is not willing to enable your friend or loved one to continue to mis-manage their money as well as someone who is following Biblical guidance.

You are someone who just may be the person who helps your friend or family member begin a new journey in life. You can take this opportunity to sit with them and help them work a budget teach them how to handle their money so pay for a car on their own without the help of anyone else.

Give a man a fish feed him for a day. Teach a man to fish, feed him for a lifetime.

How do you want to help your friend or loved one?

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