Co-signing is “STUPID,” Says The Lord

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“It’s stupid to guarantee someone else’s loan.” Proverbs 17:18, Contemporary English Version (CEV).

I’m not sure how accurate this translation of Scripture is, but it grabbed my attention the first time I heard it. For the more conservative Bible scholar, the KJV says, “A man void of understanding striketh hands, and becometh surety in the presence of his friend.” See, it just doesn’t “POP” the way the other one does.

Whatever translation you fancy, let’s unpack this thing and try to figure out why cosigning is such a terrible thing. For starters, when someone needs a cosigner, someone in the business of selling loans has already reviewed this persons credit history and come to the conclusion that your broke half cousin-in-law, I mean the person in desperate need of financial leverage, can’t be trusted on their own to pay the money back. So the lender needs someone who they can trust, someone with good credit, to agree to repay the loan in the event the original borrower does not.

For me, that would be enough, but I know you’re far more loving, merciful, and generous than am I, so I’ll continue. The same banks that send credit card offers to dogs, dead people, and 4-year-olds do not trust this person to make good on the debt. The same people who spend millions of dollars trying to get 18-year-olds living on student loans to borrow money, will not lend to this person. But you…your tender heart wants to believe, “He just needs a little help to get on his feet. He’s ready to turn his life around and start being responsible. Besides, he needs the car or he won’t be able to get to work.” RUBBISH! PURE RUBBISH!

Please don’t kid yourself. I know you love this person and it’s very hard to say, “No” to a loved one in need, but here are the facts. There is a very high probability that your beloved, with his great intentions, will stick you with the bill. That’s why he needs a cosigner in the first place; because professional lenders don’t believe he’ll pay up.

Don’t get trapped in the guilt trip of not being there when they need you, either. If you truly love that person, find the nicest way possible to say, “No.” Please understand me, I’m not being mean, but I am trying to save your relationship. If you are absolutely sold on the idea that whatever this person needs is a necessity, just give them the money. If you don’t have it to give, you don’t have it to give.

When the original borrower doesn’t pay the bill, you’ll be stuck with the payments. Now picture Thanksgiving dinner. You’re sitting across the table from someone who owes you money. You look at their family dressed all nice in the new clothes they bought with the money they owe you. And they act like it’s all good. And you try to convince yourself, “It’s the principle, not the money.” But the principle is, “THAT GUY OWES ME MONEY!” So you don’t talk to each other for years, and you can cut the tension with a plastic knife whenever you two are in the same room. All of this because you chose to sign a note that you knew they could not pay.

People usually cosign for others out of a genuine desire to help, but more harm than help comes out of these deals far too often. The truth is this. A person usually needs a cosigner because they have a proven track record of misbehaving with money. When someone cosigns, they enable the person to continue in that misbehavior and they also set themselves up to be the a potential victim of the same. And if you don’t know, the closest people to the debtor are the farthest down on the payback list. They know how much you love them, what they owe you doesn’t show on a credit report, and they’re pretty sure you’re not going to sue. You’ll just stop talking, be upset, and hopefully get over it.

Again, I’m not sure about the CEV’s accuracy, but Proverbs 11:15 says, “It’s a dangerous thing to guarantee payment for someone’s debts. Don’t do it!”

But what if I’ve already cosigned for someone? If you’ve already cosigned for someone, take this advise from the CEV’s rendition of Proverbs 6, “My child, suppose you agree to pay the debt of someone, who cannot repay a loan. Then you are trapped by your own words, and you are now in the power of someone else. Here is what you should do: Go and beg for permission to call off the agreement. Do this before you fall asleep or even get sleepy. Save yourself, just as a deer or a bird tries to escape from a hunter.”

Life Without Loans! My loans, your loans, or anybody’s loans!

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