Asking strangers to help you in exchange for money always carries a bit of risk, but for those people who don’t have good enough credit to qualify the loans they need, sometimes it seems there’s no other choice. In a sign of continued hard times, some cash-strapped folks are posting ads on Craigslist seeking a loan co-signer to help them out of a jam.
CNNMoney highlights the case of one man who came on a student visa from Mexico and wanted to transfer to a nursing program after community college. But his family can’t afford to help him, so he applied for a $20,000 loan. Without much in the way of previous credit or income, he was turned down.
He turned to Craigslist to post an ad for a potential co-signer, offering a $1,000 reward once he got the loan. But so far he’s just gotten scammy offers asking for his bank account numbers and also personal info. If he doesn’t get the loan somehow, he’ll lose his student visa.
He’s not the only one going to desperate measures to land a loan in Craigslist’s “Financial services” section either, for a wide array of needs: Personal, auto, student home and business loans and even rental residences.
On the other hand, if someone was willing to be a co-signer, that role could very likely end up costing you a pretty penny. Taking on the risk for another, a person you probably don’t even know who could end up defaulting on that loan, would mean a potentially huge financial burden.
A bank didn’t think that someone was worthy enough to trust with a loan, so why should you? Of course, there are probably plenty of people deserving of a loan that can’t get one from a bank, but the chance is there.
There’s not much you can do if the you-know-what hits the fan, even if the borrower and co-signer sign a legal contract releasing the co-signer from any responsibility to pay the loan, said a spokeswoman for the American Bankers Association. A bank could still track down the co-signer in the case of a default and make that person then hound the borrower for the cash.
Desperately seeking co-signers — on Craigslist [CNNMoney]