If I co-sign a loan (e.g. for a friend or family member), does it affect my own ability to borrow money due to the debt-to-income ratio?


It appears that co-signing does impact your debt-to-income ratio, at least in the US. An article on Kiplinger says:

The loan you've co-signed for can show up on your credit report, just like any other debt you have . . . As a result, the loan you've co-signed for can increase the size of your outstanding debt -- added to your mortgage, credit-card balances, car loan or student loans -- when lenders are deciding whether to let you borrow more money. You might have a tough time taking out other loans if the lender decides that your debt-to-income ratio or balance-to-credit limit is too high -- even if the payment history is perfect.

An article on Forbes agrees saying:

When you cosign any form of loan or line of credit, you are liable for the amount of money borrowed. This may affect your ability to borrow money for yourself because a lender for a larger loan, such as vehicle and home loans, will include the amount of the loan you cosigned on as part of your debt load when calculating your debt-to-income ratio.

There is a similar question here.

protected by Chris W. Rea Apr 18 at 2:24

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