A finance broker made me the primary instead of a co-signer

External question — Personal Finance Stack Exchange Author: Mirathea Amelie Original post: https://money.stackexchange.com/questions/163637 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. My friend asked me to co-sign for her to get a personal loan using a finance broker. I agreed because I trust her and I wanted to help. She received the money by e-transfer and she is paying the loan through auto debit deduction. Little did I know that the loan was named with me as the primary and it was transferred to a car dealership, which they made it a car loan and my vehicle was made as a collateral. I could not sell or trade my car for that matter. The finance broker didn’t inform me and I was unaware of what the outcome will be. Now it seems that I did make the loan and my vehicle will be repossessed if my friend defaults. The money that was transferred to her was 30k but the term in the loan was 66k payable for 84 months. She was ripped off basically. What can I do to take out my name out of this loan?

External answer — Personal Finance Stack Exchange Author: Pete B. Original post: https://money.stackexchange.com/a/163638 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. This is a tale as old as time. Yes these "finance broker", whatever that means, lie. There really is no such thing as a co-signer, only a co-owner. In addition to being on the hook for the loan if your friend defaults, you also opened yourself up to liability. If your friend, loans this car to another friend, and that friend does something negligent with the car you could be sued as you are an owner of the car. It sucks. The only real way to get out of this is to pay off this loan, by either replacing it with another loan or selling the car. To sell the car and do away with the loan will probably require cash to make up the difference between the value of the car and the loan amount. So I understand that you wanted to help your friend out, but was 30K really necessary? That is a lot of money to spend on a car for a person who is having financial difficulties. Even if they do continue to make the payment, they will end up paying over 66K for a car that might be worth 8K when all is said and done and if things go well. That is not a recipe for improving someone's financial position. Had you helped this person purchase basic transportation for a more reasonable amount (like $5,000 or less) that would have been far more helpful.

External answer — Personal Finance Stack Exchange Author: Nosjack Original post: https://money.stackexchange.com/a/163640 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. I don't understand how they could "transfer to a car dealership" and then put a lien on your car. Was this actually a personal loan (no collateral) or did you give them your car's information (make, model, VIN)? You need to read the paperwork (that you signed!) to know what your rights are and how this is structured. It sounds like they took your car information, put a lien on it, then paid your friend the loan. You have all of the risk and none of the gain in this transaction (other than "helping" your friend). People throw around the term "co-signer" but that doesn't mean anything. Both of your names are on the loan so you are both equally responsible. The only way to get the loan off your car is to pay it off with a new loan or sell the car and pay it off (which will require cash unless the car is worth more than the loan). @Vicky mentioned a 26.5% APR. This is predatory especially on a loan with collateral. Figure out how to refinance or pay this off quickly! In the future, give your friend a gift (not a loan!) without expecting payback. Anything else will usually end in frustration (at best) or financial ruin (at worst).

External answer — Personal Finance Stack Exchange Author: keshlam Original post: https://money.stackexchange.com/a/163649 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. In a cosigned loan, both the signers are equally responsible for making the payments. Primary only means that person is the one expected to make normal payments. If your friend isn't paying on time, the lender can certainly demand that you do so. If it is a secured loan, they are entitled to demand that you sell the securing item to make those payments, or let them do so; that's what securing the loan with existing property means. This is essentially the same thing as repossession, though in that case the loan is secured by the item that was purchased. However, they can't add collateral after the loan has been signed. So if they are threatening to take your car, either you agreed to that when you signed the loan, or they are suggesting that you could sell the car in order to make the payments but you can make them however you want, or they are lying to you in order to scare you into making payments more quickly. Given the usurious interest rate (is this a credit card loan?), I would not be surprised by any of those three. This is not a loan your friend, or you, should have gone anywhere near. You could try asking a lawyer to review the terms of the loan to make sure they aren't just lying. But as cosigners, you and your friend have to come up with the money somehow. Given that high rate of interest again, one obvious suggestion is to refinance. That is, talk to banks about finding a loan with a more reasonable interest rate, and using that to pay off this one. If you can qualify for a more normal loan, the savings in interest could be HUGE . I have helped one relative, and one friend, arrange exactly this. In those cases, I was the one who took out the new loan, and I had my friend sending me checks to make the payments. If they had to skip a payment, I made it, and made a note that they owed me that payment plus interest. Less expensive, more straightforward, and realistically it's the same arrangement, and risks, as cosigning except that you, rather than the bank, have to keep track of what your friend still owes you. Or, you could not bother taking out the loan, and just lend the friend your own money, assuming you have that much cash on hand. You would lose whatever interest you are gaining from whatever account that money is sitting in, but you wouldn't be paying interest. That may or may not be a better deal for you financially. Of course, you should still be charging your friend interest, to make up for the interest you are losing. Those would be my recommendations now. You and your friend have the bad loan, with an awful interest rate. You and your friend have to pay it off. Taking a more reasonable loan, and paying it off in full now before it accrues more interest at that rate, is the best way out of this hole. Next time, remember that if you are considering copaying, you are effectively taking out the loan on their behalf. If it isn't a reasonable loan, and if you wouldn't be willing to lend them your own money (since effectively that's what you're doing), don't do it. But for now, you're stuck, and may need to focus simply on limiting your losses until and unless your friend's finances improve. And they owe you one hell of a favor.