Lending your name to a relative or friend who can make a personal loan is a very dangerous action. It is even worse than lending money to people, since the name is what identifies before society and can get dirty if the beggars do not pay the debt.
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It is one of the common activities among Brazilians as well as lending the credit card and are responsible for much of the country’s defaulting consumers.
In an agency survey, 90 percent of delinquents interviewed admitted that they were not careful when lending their names to others to avoid future defaults.
Should I lend my name to anyone to make a loan?
Definitely not! Lending your name and social security number to take out a personal loan for anyone is a very serious action and how everything in life has its risks. Therefore, this decision must be considered and evaluated before a definitive answer.
The most reliable is, in the case of a loan, to lend your name only to trusted family or friends, yet always with a “back foot”. This decision can leave your name dirty in the square and you lose future opportunities, failing to find facilities at the time of some banking transactions and the purchase of installment products, for example.
Often the default is not thought of, but as unforeseen events always happen, people who have used your name to get credit may become unemployed, have a health problem that prevents them from working and thus are unable to repay the loan. and with that you have to pay the installments to avoid further problems.
Also, in most cases, people break friendships with others and stop talking about financial situations like this, which can be very annoying and financially damaging.
What should I consider when lending my name to a third party?
Reliability: The most important thing is to measure the level of trust you have in the person who borrowed your name. It’s a friend? A relative? Without justifying friendship, ask if he usually meets his obligations or if he has a history of past defaults.
Loan Amount: As important as trust is the loan amount. Do the simulations of the values, always remembering that the interest on the personal loan is quite high and consider if the final value is within your means, so that in case you can not afford part of the installments, you can pay not to be with the “dirty name”.
Financial Situation: At these times you need to evaluate your own financial situation. Remember that having a clean name is nothing more than your obligation and that does not mean you have plenty of money. As a precaution, if you are in a bad financial time, it is best not to lend the name under any circumstances, as the likelihood of getting the name wrong in case of default is high.