I'm a pretty competent guy when it comes to financial stuff. I've never gotten in over my head financially because I'm pretty conservative.
As I mentioned yesterday, I cosigned for R. to get a line of credit. Mrs A. and I were talking and she said she was talking to one of her co-workers at the bank, and the co-worker asked if I had voided the master on the loan application.
HUH?
It seems that when you cosign on the loan, if the master is not voided, the other party can apply for any other kind of loan, using the same master.
So if R. decided she wanted a new car, she could have waltzed into any dealership and bought a car, using the Master Loan Agreement as her collateral, and because I have excellent credit, they would sell her a car. Without even informing me. I would only know when it showed up on my statement.
The Master stays in effect for five years.
Now I love R. and I don't think she would do that, but it's a whole lot safer to remove the temptation. So I went down to the bank after work yesterday and voided the Master on the loan.
The Bank should have to inform you about this when you cosign the loan. I was completely unaware.
3 comments:
I didn't know that either but I am more likely to ask someone to cosign than to cosign for another. someday....someday.....
I had no idea a thing even existed like that.
I am totally clueless when it comes to stuff like that...ANY banking stuff...loans, interest rates, mortgage percentages...it's all Greek to me.
Duh.....
dapnewood: This is a first for me. I have been approached about it before, but was never in a position to do it. Scary stuff!
PQ: I figured not a lot of people knew this, so it would be something good to share. Not as interresting as, say Chicken Hypnotizing, but good info.
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