Guest MDSMelissa Posted July 9, 2004 Report Share Posted July 9, 2004 Hello, I've got a question just from reading the various posts. Re: opting for life insurance vs. having a co-signer. I am confused as to why someone would chose to pay for life insurance on their LOC. Could someone enlighten me on the down sides to having a co-signer (aside from not having anyone to fill this position)? Thanks, Melissa Link to comment Share on other sites More sharing options...
Guest Koppertone Posted July 9, 2004 Report Share Posted July 9, 2004 I think the problem, for me at least, lies in having your cosigner (usually a parent) being responsible for your debt. If I were to die I'd rather have the life insurance cover my $100,000 in debt rather than leave it for my parents to pay. Plus, if your parents have any plans to get a new house, car, etc. being a cosigner on your credit may make this more difficult for them. And lastly, I think it looks better on your credit to say that the debt was soley in your name (although I may be mistaken). Check out this website for an interesting case of cosigning resulting in bad credit www.bankrate.com/brm/news...rodtype=cc Link to comment Share on other sites More sharing options...
Guest chemgirl Posted July 9, 2004 Report Share Posted July 9, 2004 Yeah, pretty much what Koppertone said. There's no way I would want my husband or parents to be responsible for my LOC or mortgage. It would basically be leaving them with nothing, as well as hindering their opportunities to take out a loan or mortgage. Personally, since I would never agree to be a cosignor to anything for those very reasons, I wouldn't ask anyone to do it for me. Maybe if their net worth was like, $20 million dollars and they wouldn't notice a thing, but I don't know anyone like that! Link to comment Share on other sites More sharing options...
Guest Lorae Posted July 10, 2004 Report Share Posted July 10, 2004 When someone co-signs for a loan it becomes *their* loan. It shows up on their credit report as their loan... it doesn't even say it's a co-signed loan for someone else. Essentially you just get to use it. It will change their credit rating to reflect the high debtload and could alter their ability to be granted more credit of their own. Plus, if you have late payments or something it will negatively impact their credit rating. Most of us just prefer not to do that to our parents (or whoever) since we are independent adults with good future earning potential. Having a massive line of credit is a responsibility I'd rather have alone. Life insurance is an added cost, but worth it in my opinion. Link to comment Share on other sites More sharing options...
Guest JSS02 Posted July 10, 2004 Report Share Posted July 10, 2004 When I signed up for my LOC with BMO a couple years ago, they required neither life insurance NOR a co-signer... if you look around you still might be able to find a deal like that. Link to comment Share on other sites More sharing options...
Guest MDSMelissa Posted July 11, 2004 Report Share Posted July 11, 2004 Thanks for the feedback! I didn't realize the amount of responsibility involved for the co-signer (i.e. it essentially becomes his/her debt too and may affect both yours and their credit rating.) I'll have to sit and think on this one for a bit... Melissa Link to comment Share on other sites More sharing options...
Guest McMastergirl Posted July 13, 2004 Report Share Posted July 13, 2004 My BMO LOC requires life insurance - are you sure you didn't sign up for it somewhere deep in the fine print? As far as I know most banks require LOCs to be life-insured - you can opt out of buying their insurance (which tends to be extremely expensive) and buy a private policy, but they ask for confirmation that you're covered. I'd double-check that if I were you. Link to comment Share on other sites More sharing options...
Guest DonaldKaufman Posted July 13, 2004 Report Share Posted July 13, 2004 Hi guys, Just for your info, I am with MDM and the life insurance that comes with their LOC is 27 cents per $1000 borrowed per month. I asked their rep if I could use private life insurance provided I could find a better deal, and he sort of chuckled and said "You will DEFINITELY be able to get it cheaper". If you want to opt out of their insurance, you just have them send you forms that you get filled out once you have your own life insurance policy setup, and then mail the forms back to them. It sounds pretty simple, so I'm pretty sure I'll find my own insurance. -DK Link to comment Share on other sites More sharing options...
Guest Ali Posted July 27, 2004 Report Share Posted July 27, 2004 Hi. I am entering 2nd year med and I am trying to negotiate a line of credit increase-last year I got $15 000 from BMO, and this year I wanted another $25 000. Last year my dad co-signed and it was a big pain in the butt for him because he has multiple layers to his finances (personal, partnership, corporation etc). I wanted to do it this year without a co-signer to save him the hastle but they said because of my debt load (20 K in student loans, $2600 on my LOC) I couldn't do it without a co-signer, and this would be the case until I started residency. So I guess my question is what banks will do this for me without a co-signer? If I know that other banks will, maybe BMO will also do it so that they can keep me as a customer... Thanks Link to comment Share on other sites More sharing options...
Guest Koppertone Posted July 27, 2004 Report Share Posted July 27, 2004 As far as I'm aware, MD Management doesn't require a cosigner unless you have extenuating circumstances (ie. you have bad credit). The same goes for Royal Bank. Link to comment Share on other sites More sharing options...
Guest Ian Wong Posted August 7, 2005 Report Share Posted August 7, 2005 Floating back to the top. Ian Link to comment Share on other sites More sharing options...
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