What are my rights if my co-osigner paid off a loan without me knowing?
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What are my rights if my co-osigner paid off a loan without me knowing?
My co-signer on a private student loan paid off the balance without me knowing and is now demanding that I pay her. I did not want her paying off my loan because the financial institution gave me deferment options that she will not. She did this without without any verbal or written consent of mine (me being the primary holder of the loan), and now she is now demanding that I pay her the full balance, which I cannot. This seems wrong. Is it illegal?
Asked on June 2, 2012 under Bankruptcy Law, Illinois
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
If the person who co-signed your loan paid it off without you knowing about it, you would be obligated to reimburse this person for the money paid. However, the time for repayment would be subject to the original loan's pay off.
Meaning, if the full balance of the loan was paid off early, you should not be penalized to repay the full loan to the co-signer unless you were behind in your monthly installments on it.
There was nothing illegal for the co-signer to pay off the loan in full when it was done.
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