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Home >> Lending >> Personal
Helping Son to Get a Personal Loan
I was hurt at work about five years ago and just received a settlement of about 1.7 million. My son is having some cosmetic dentistry soon, but has bad credit and is unable to get a loan. My credit is also bad, because when I was injured I was unable to pay bills. My son refuses to let his mother and I pay for the work, but he will accept our help to secure a loan. Is there a way to leverage our money to get him a loan? Our credit is bad, but we will have plenty of money. He wants to set up auto payments through his bank to ensure that we do not try to pay for it ourselves.
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 Probably the easiest way to help your son out is a secured personal loan from his bank. If you deposit funds in a CD in your son's bank and offer to co-sign for him on a loan there, pledging your CD as collateral, you should be able to help him get that loan, while giving him the opportunity to prove to himself and his bank that he can manage the loan.
Your son has his reasons for not wanting to take your money. There's probably a mix of pride, ego, a need for independence, and a lot of other stuff going on with him. He could be embarrassed by his poor credit history, too. He may realize that taking money from you won't do anything to improve his credit or enhance his sense of self-worth. On the other hand, he knows that he needs help and is willing to accept it on his terms. That gives you the opportunity to help in a positive way.
Co-signers add their signatures with their eyes wide open, so we urge you and your son to consider the possibility that he won't be able to manage the loan properly. In that case, you would have to make the payments yourself, or let the bank take the CD to pay off the loan. That's the risk that you and your son would take with a loan secured by your co-signature and deposit.
Published on BankingQuestions.com 11/10/09
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