Co-signer

Description

Co-signer

A co-signer is a person who also agrees to repay a loan. Private lenders sometimes require a borrower to get a co-signer. Having a co-signer may allow a student to borrow at a lower interest rate if the co-signer has a good credit record, but it carries risks for the co-signer. Before you co-sign a loan or ask someone to co-sign a loan, you should consider the obligations and risks associated with co-signing a loan.

Co-signers are equally responsible and legally obligated to repay the loan. Co-signers should consider whether they are willing and able to repay the loan if the student borrower does not repay the loan on time.

Any late or missed payments for a co-signed loan will affect both the co-signer and the student’s credit history. A co-signer should decide before co-signing a loan whether they are willing to risk harm to their credit record if the student borrower does not repay the loan. Private lenders often hire collection agencies to get a co-signer to repay. A lender or a debt collector may also sue a co-signer.