Why Candian Seniors Should Not Cosign Loans

Canadian Money Manager Advises -Do Not Cosign Loans!

Has someone asked you to cosign a loan? I was listening to this podcast about going through tough times on Focus Canada and was very surprised to hear a spot in the middle where money adviser Tom Copeland said seniors should never put up their retirement savings as collateral when asked to cosign on a loan. Why?

Many people do not realize that when they cosign on a loan, they could not only lose the money they put up for collateral but also the relationship.

Cosigning on a loan or giving a direct loan creates a very sticky situation in a relationship. Suddenly, a little voice starts to critique each item the borrower purchases. If that niggling little voice does not come from inside you, evil will put people beside you to voice their concerns when they learn you have helped someone directly financially. Remember the other son in the story of the Prodigal Son?

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In addition to this, the borrower may also start feeling self-conscious and become more distant.

Caring Helpful Strategies Instead of Cosigning

What can seniors do when asked to loan money directly to another person or cosign on a loan?  While I am not a financial expert, I have searched for some answers as to what caring seniors can do when they want to help people and still keep their relationships intact.

5 Ways to Care Without Cosigning

How can you show you care for people in financial need without giving a direct loan or cosigning?

1. Pray. If you've read my articles on this blog for a while, you were probably expecting this as my number one answer. Why is this my go-to answer for all decisions?  Frankly, there are times I did not pray about a decision and it got me into a lot of hot water! In addition to this, Our Creator may have a wonderful miracle in store that would be missed if you insist on doing it all by yourself.
2. Direct the person needing financial help to an agency. When the funds come through a third party it puts less strain on a relationship. Here, it is handy to have a current list of places that think creatively outside the box that offer low-interest/no interest loans. If you do have funds that you could potentially use to help someone, make it a policy to direct many people to the organization where you invest your funds. As much as possible you need to "give so your left hand does not know what your right hand is doing."
3. Give it as a gift. Now this option can be a bit iffy, depending on the relationship. Some wealthy parents will sometimes gift a car or even a home to children. You need to examine yourself very carefully and see if it is in you to be able to give a gift with no strings attached. Will you be able to keep your relationship intact? 
4. Purchase something from the person who needs the loan. Perhaps they don't even realize that they have something you could use. Or better yet, have someone else purchase items from your friends and loved ones. There are several places where they can list things for sale for free. For example, I have recently sold an item through the Karrot community. 
5. Help the person find work or a better job.&nbs Hmmm.. by the way... if you know of anyone who could use a writer with a teaching degree that is hiring - here's my linktree > @Sister_Su | Linktree

 

  About This Author

Sister Su is grateful to God for keeping her alive. She is a Trent/Queen's Concurrent Education graduate with over 20 years of teaching experience. She writes on several blogs, has a YouTube channel and is most easily reached through Twitter @Sister_Su See her link tree for more details:@Sister_Su | Linktree

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