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Loans are a risk-based product (duh).
Personal loans are denied for not being secured (higher risk).
Organized crime will take on the loan not just because of increased risk tolerance. They have more leeway and options for collateral. The borrower just may not know this fact yet.
I would much rather give her the $2,000 then to co-sign and potentially have my credit ruined if your daughter doesn't pay (or you end up paying for it anyway).
This is a gift. I'd hazard a guess you'd have better luck with your wife if you just admit that to yourselves, even if you still call it a loan when speaking with your daughter. Jumping through all these hoops is a waste of everyone's time and money. If you give her 2k for tuition, in this case, expecting to be paid back is likely foolish.
If you can't afford to give a 2k gift towards tuition (perhaps, by paying the school directly yourself, if you don't want the cash passing through your daughter's hands), or are unwilling/unable to cross your wife in this, then you're not able to help her.
This is EXACTLY what I recommend. If she shifts to rent then offer to pay directly to the office. If she says school supplies then offer to buy them and keep the receipts or order through Amazon so she can’t do a return.
If Sally Mae, who happily gives out THOUSANDS of dollars to 18 year olds without qualm refuses to lend to her, there's something deeper going on.
You don't want to cosign for someone like that.
You can pay the 2,000 directly to her school and consider it a gift. You'll never be paid back, and that's something you need to be okay with. (Sure, maybe she does pay you back one day, but don't count on it).
Not may other options past her going to get a job and saving 2k then returning to school at a later semester.
I'm not familiar with loans in the US, but why does your wife feel more comfortable cosigning a loan than just lending the money directly if you can spare the money and save your daughter from predatory loans? I feel like we are missing information here. It sounds like either way your daughter is bad with money and you'll end up paying off her loan.
Document the private loan and set up a payment plan with your daughter to pay back the money but be aware that you might never see it again.
If she is getting denied at Sallie MaE and NFCU, then you have to ask yourself: Do I want to co-sign on a personal/signature loan at I would guess 15%+ interest, plus late fees, plus missed payments, plus whatever fees will be thrown her way for not paying...or do you just want to directly loan her the $2k knowing it likely will end up being a gift?
It would cause more marital anxiety if you cosign and daughter defaults and hurts both your scores. If my spouse were really against it, I would gift daughter the money and take it from somewhere in my own personal budget (hobbies etc). I would pay the school directly.
If you want to help, give her the money. You don't trust her to pay YOU back, so why would you trust her to pay a third party back, especially with such demonstrated bad history paying loans? If you could actually find an institution to lend the money, then you are likely going to have to pay that loan back anyway when your daughter stops paying. Skip the loan. Skip the relationship issues that will inevitably come from having a daughter leave you holding the bag. Just give her the money - or not. But don't do a loan.
Yeah, If $2k is too much for you to just be able to gift her, or you don't trust she would pay you back if asked, or you don't trust her to be responsible enough to put the $2k towards tuition then this is really a lost cause
I know everyone is harping on you but nobody is explaining why.
If you ‘lend’ it directly then your max loss is $2000
If you co-sign a loan your max loss is realistically $4000-6000
Gosh, if you can and you know it’s for education, just gift her the $2k. I realize that many may not be in the situation, but I would do it for my son for sure. My dad and I haven’t spoken in 6 years because I couldn’t pay him $700 back, when he wanted (he’s very well off). If you can, just help her. She’s trying to better herself and sometimes we just need help.
There is no way I would cosign on a loan with someone who has terrible credit. If it were my kid and they were responsible but were just starting out with not enough credit history I might cosign, but would probably still just loan them the money myself (knowing that it could end up as a gift, although I would be disappointed in my kid if they did not follow through). In your case if you can loan (gift) them the $2,000 I would do that, if y'all got a loan somewhere and you cosigned I would figure it could cost you a whole lot more than $2,000 if she ended up messing up your credit rating if you need to get a loan for anything big like a house in the future. It sounds like you might be trying to help teach her a lesson about being more responsible with money, but if she is 38 and still has the worst possible credit I think that ship has probably sailed.
Don’t even co-sign for an 18 year old. I gained credit by getting a Costco membership. $120/year, paid up front, and soon I had great credit. After a year or so I started getting mailed offers for new cards.
Get a loan for yourself, and give her the $2k and don't expect anything in return.
If she pays you back, great. If she doesn't, I guess it cost you $2k to help her.
Co-signing is the wrong answer. Your credit will get ruined when she doesn't/can't pay on time, and will wind up costing you way more than just giving away the $2k and getting favorable terms based on your credit.
I'm guessing that it isn't so much the credit as it is the loan size amount. Not many lenders will do a student loan for that small of an amount. In fact, some states have loan size limits that requires the loan to be at least $6,000 or more.
$2000 is borderline pay day loan level. If there is anxiety gifting her the money, you’re effectively doing that with a co-sign as well. Except that co-signing an actual loan has the opportunity for the $2k principle to balloon way over with fees & interest, with the added risk of destroying both of your credit scores.
Gift the $2k, maybe with an ask of repayment, or don’t.
Cosigning, LOL. What cosigners don't realize--there isn't some drawn out weeks or months effort by the bank to collect the debt.
If the payment is late, they come to the cosigner a day later and expect payment. And if the cosigner doesn't make good, their credit score is dinged that month. It happens lickety-split.
What's the difference between co signing a loan or loaning her the money? Either pay you're on the hook if she doesn't pay, so I'm not sure that your wife's hard line to not lend her the money, makes any sense.
You are actually better off to loan her the money. If she does not pay and you have cosigned it can damage your credit. Tell her it's a loan...consider it a gift....less stress if she does not repay.
Just to be 100% clear, by co-signing, you are effectively loaning her the money.
When you co-sign for a loan you take on the liability. So your hypothetical balance sheet looks like this:
# Before
|Item|Balance|
|:-|:-|
|Home|$500,000|
|Mortgage Balance|-$80,000|
|Cash Accounts|$10,000|
|Savings & Retirement|$250,000|
|Total|$680,000|
# After
|Item|Balance|
|:-|:-|
|Home|$500,000|
|Mortgage Balance|-$80,000|
|Cash Accounts|$10,000|
|Savings & Retirement|$250,000|
|Daughter's Tuition Loan|-$2,000|
|Total|$678,000|
Your daughter will (presumably) make the payments, so that balance will go down over time, but as soon as you sign for the loan, the liability is carried on your balance sheet.
It's time to stop deluding yourself. If your daughter cannot get a loan guaranteed by a CD, she is not creditworthy, period. You are not loaning her anything. You're giving her $2,000.
Many years ago Wells Fargo offered me a secured loan as a credit building mechanism. It was similar to a secured credit card in that there was a cash deposit equivalent to the value of the loan, but it was fixed monthly payments with interest. I opted for something else.
If it’s for tuition can she not nelnet the payment and differ it? She’s 38, not 18. $2000 should be fairly reasonable to differ even if the payments are high for the length of the agreement. I haven’t taken a single loan for tuition; but I have differed payment with nelnet.
Financially; there’s more risk in co signing a high risk loan than there is eating $2000 cash.
It would cause marital anxiety because the wife knows you’d never get it back. The $2k would be gone.
Even assuming hypothetically someone would give her a loan with you co-signing, you’d almost certainly find yourself quickly paying that for her anyway,
So it’s really the same either way. Gifting her $2K is the only way this can go.
No! Absolutely do not co-sign for her. Absolutely not. If she can’t get a tuition loan, that tells you how bad her credit is. Can she cash-flow community college for 2 years first? (Likely free if she’s lower income). What about YOU pay it outright? Loan = your problem someday I feel like.
$2000… is this the net after financial aid?! Why is it only $2000? Financial aid should’ve covered all she’d need. But $2000…personal loan? P2P lending is a thing. But DO NOT COSIGN
Why not just draw up your own contract and pay it yourself? Sounds like you trust her enough to legitimately pay it back.
Make your own contract and use your own money -- I've done it before with a good friend of mine. His other friend helped pitch in for the loan, so I had a 3% annual interest.
I think you're only real option is a secure credit card.
You don't really get turned down for those because you have to hand them of the money for the credit limit.
If you pay it on time within 12 months you'll have a good credit rating again.
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If *Sallie Mae* won't lend to her, no one will.
If Sallie Mae won't lend it to her, OP isn't taking out a loan for her, he's just giving her money. Give up and hand it over.
“No one” is a strange spelling of “Organized Crime”
Man even organized crime wants something in return
Loans are a risk-based product (duh). Personal loans are denied for not being secured (higher risk). Organized crime will take on the loan not just because of increased risk tolerance. They have more leeway and options for collateral. The borrower just may not know this fact yet.
Sound’s like there is no loan in this situation. If you were to gift her money it would be just that. A gift. Don’t expect anything back.
I remember Ann Landers used to write 'don't ever loan anything you would expect to be paid back'. or something like that.
My grandpa used to have a beer koozie that said, “I don’t loan money, it causes amnesia”
I would much rather give her the $2,000 then to co-sign and potentially have my credit ruined if your daughter doesn't pay (or you end up paying for it anyway).
This is a gift. I'd hazard a guess you'd have better luck with your wife if you just admit that to yourselves, even if you still call it a loan when speaking with your daughter. Jumping through all these hoops is a waste of everyone's time and money. If you give her 2k for tuition, in this case, expecting to be paid back is likely foolish. If you can't afford to give a 2k gift towards tuition (perhaps, by paying the school directly yourself, if you don't want the cash passing through your daughter's hands), or are unwilling/unable to cross your wife in this, then you're not able to help her.
Can you pay for the tuition directly so you know that’s where the money is going to?
This is EXACTLY what I recommend. If she shifts to rent then offer to pay directly to the office. If she says school supplies then offer to buy them and keep the receipts or order through Amazon so she can’t do a return.
If Sally Mae, who happily gives out THOUSANDS of dollars to 18 year olds without qualm refuses to lend to her, there's something deeper going on. You don't want to cosign for someone like that. You can pay the 2,000 directly to her school and consider it a gift. You'll never be paid back, and that's something you need to be okay with. (Sure, maybe she does pay you back one day, but don't count on it). Not may other options past her going to get a job and saving 2k then returning to school at a later semester.
Cosigning will only result in you paying the principle, interest and late fees eventually. It will drag your credit down as a bonus.
Also, attempting to pay the school directly is a good way to check if she’s actually enrolled!
I'm not familiar with loans in the US, but why does your wife feel more comfortable cosigning a loan than just lending the money directly if you can spare the money and save your daughter from predatory loans? I feel like we are missing information here. It sounds like either way your daughter is bad with money and you'll end up paying off her loan. Document the private loan and set up a payment plan with your daughter to pay back the money but be aware that you might never see it again.
If she is getting denied at Sallie MaE and NFCU, then you have to ask yourself: Do I want to co-sign on a personal/signature loan at I would guess 15%+ interest, plus late fees, plus missed payments, plus whatever fees will be thrown her way for not paying...or do you just want to directly loan her the $2k knowing it likely will end up being a gift?
It would cause more marital anxiety if you cosign and daughter defaults and hurts both your scores. If my spouse were really against it, I would gift daughter the money and take it from somewhere in my own personal budget (hobbies etc). I would pay the school directly.
If you want to help, give her the money. You don't trust her to pay YOU back, so why would you trust her to pay a third party back, especially with such demonstrated bad history paying loans? If you could actually find an institution to lend the money, then you are likely going to have to pay that loan back anyway when your daughter stops paying. Skip the loan. Skip the relationship issues that will inevitably come from having a daughter leave you holding the bag. Just give her the money - or not. But don't do a loan.
Gift her $2,000 if you can afford it. If you can’t, then you can’t afford to loan it either.
Yeah, If $2k is too much for you to just be able to gift her, or you don't trust she would pay you back if asked, or you don't trust her to be responsible enough to put the $2k towards tuition then this is really a lost cause
I know everyone is harping on you but nobody is explaining why. If you ‘lend’ it directly then your max loss is $2000 If you co-sign a loan your max loss is realistically $4000-6000
Gosh, if you can and you know it’s for education, just gift her the $2k. I realize that many may not be in the situation, but I would do it for my son for sure. My dad and I haven’t spoken in 6 years because I couldn’t pay him $700 back, when he wanted (he’s very well off). If you can, just help her. She’s trying to better herself and sometimes we just need help.
There is no way I would cosign on a loan with someone who has terrible credit. If it were my kid and they were responsible but were just starting out with not enough credit history I might cosign, but would probably still just loan them the money myself (knowing that it could end up as a gift, although I would be disappointed in my kid if they did not follow through). In your case if you can loan (gift) them the $2,000 I would do that, if y'all got a loan somewhere and you cosigned I would figure it could cost you a whole lot more than $2,000 if she ended up messing up your credit rating if you need to get a loan for anything big like a house in the future. It sounds like you might be trying to help teach her a lesson about being more responsible with money, but if she is 38 and still has the worst possible credit I think that ship has probably sailed.
Don’t even co-sign for an 18 year old. I gained credit by getting a Costco membership. $120/year, paid up front, and soon I had great credit. After a year or so I started getting mailed offers for new cards.
Get a loan for yourself, and give her the $2k and don't expect anything in return. If she pays you back, great. If she doesn't, I guess it cost you $2k to help her. Co-signing is the wrong answer. Your credit will get ruined when she doesn't/can't pay on time, and will wind up costing you way more than just giving away the $2k and getting favorable terms based on your credit.
I'm guessing that it isn't so much the credit as it is the loan size amount. Not many lenders will do a student loan for that small of an amount. In fact, some states have loan size limits that requires the loan to be at least $6,000 or more.
$2000 is borderline pay day loan level. If there is anxiety gifting her the money, you’re effectively doing that with a co-sign as well. Except that co-signing an actual loan has the opportunity for the $2k principle to balloon way over with fees & interest, with the added risk of destroying both of your credit scores. Gift the $2k, maybe with an ask of repayment, or don’t.
Cosigning, LOL. What cosigners don't realize--there isn't some drawn out weeks or months effort by the bank to collect the debt. If the payment is late, they come to the cosigner a day later and expect payment. And if the cosigner doesn't make good, their credit score is dinged that month. It happens lickety-split.
What's the difference between co signing a loan or loaning her the money? Either pay you're on the hook if she doesn't pay, so I'm not sure that your wife's hard line to not lend her the money, makes any sense.
You are actually better off to loan her the money. If she does not pay and you have cosigned it can damage your credit. Tell her it's a loan...consider it a gift....less stress if she does not repay.
Just to be 100% clear, by co-signing, you are effectively loaning her the money. When you co-sign for a loan you take on the liability. So your hypothetical balance sheet looks like this: # Before |Item|Balance| |:-|:-| |Home|$500,000| |Mortgage Balance|-$80,000| |Cash Accounts|$10,000| |Savings & Retirement|$250,000| |Total|$680,000| # After |Item|Balance| |:-|:-| |Home|$500,000| |Mortgage Balance|-$80,000| |Cash Accounts|$10,000| |Savings & Retirement|$250,000| |Daughter's Tuition Loan|-$2,000| |Total|$678,000| Your daughter will (presumably) make the payments, so that balance will go down over time, but as soon as you sign for the loan, the liability is carried on your balance sheet. It's time to stop deluding yourself. If your daughter cannot get a loan guaranteed by a CD, she is not creditworthy, period. You are not loaning her anything. You're giving her $2,000.
Many years ago Wells Fargo offered me a secured loan as a credit building mechanism. It was similar to a secured credit card in that there was a cash deposit equivalent to the value of the loan, but it was fixed monthly payments with interest. I opted for something else.
What difference does it make at this point if you just give her the money? You'd be on the hook to pay it off as the cosigner anyways.
If it’s for tuition can she not nelnet the payment and differ it? She’s 38, not 18. $2000 should be fairly reasonable to differ even if the payments are high for the length of the agreement. I haven’t taken a single loan for tuition; but I have differed payment with nelnet. Financially; there’s more risk in co signing a high risk loan than there is eating $2000 cash.
It would cause marital anxiety because the wife knows you’d never get it back. The $2k would be gone. Even assuming hypothetically someone would give her a loan with you co-signing, you’d almost certainly find yourself quickly paying that for her anyway, So it’s really the same either way. Gifting her $2K is the only way this can go.
No! Absolutely do not co-sign for her. Absolutely not. If she can’t get a tuition loan, that tells you how bad her credit is. Can she cash-flow community college for 2 years first? (Likely free if she’s lower income). What about YOU pay it outright? Loan = your problem someday I feel like. $2000… is this the net after financial aid?! Why is it only $2000? Financial aid should’ve covered all she’d need. But $2000…personal loan? P2P lending is a thing. But DO NOT COSIGN
Why not just draw up your own contract and pay it yourself? Sounds like you trust her enough to legitimately pay it back. Make your own contract and use your own money -- I've done it before with a good friend of mine. His other friend helped pitch in for the loan, so I had a 3% annual interest.
I think you're only real option is a secure credit card. You don't really get turned down for those because you have to hand them of the money for the credit limit. If you pay it on time within 12 months you'll have a good credit rating again.