Save Yourself, Like a Gazelle!

“My child, if you have put up security for a friend’s debt or agreed to guarantee the debt of a stranger— if you have trapped yourself by your agreement and are caught by what you said—follow my advice and save yourself, for you have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off; do it now! Don’t rest until you do. Save yourself like a gazelle escaping from a hunter, like a bird fleeing from a net.” (Prov. 6:1-5 NLT)

My answer is always no

Over the years I have had a number of friends ask me to co-sign for them. The reason I won’t co-sign is because the Bible makes it perfectly clear that you should never co-sign for anyone! And, quite frankly, there are many compelling reasons not to co-sign for someone else, and here are just just a few:

First, by co-signing, you take on all the risk if their loan is not repaid. Keep in mind also that they were not a good risk in the first place for the loan based on their own ability to carry the burden of the loan. The lender considered them to be a bad risk and that’s why they needed someone else with good credit and sufficient collateral to guarantee their loan.

Secondly, by co-signing you are agreeing to pay the loan completely if they don’t. Their failure to pay, often even one payment on the loan, means the lender will immediately come after the co-signer for the entire balance! You are 100 percent liable on any loan you co-sign for, which could be a significant amount. 

Thirdly, co-signing for someone else can affect your own credit. It could even make you ineligible for any future loan you may need for yourself. If you can’t afford to give them the money, you could never afford to co-sign for them. 

Therefore

It’s not worth the risk to take on another’s debt, so just don’t do it! And, If you can actually afford to help someone in need, just give them some money, but never co-sign for them!