What Is a Co-Signer?
A co-signer is an individual who agrees to take responsibility for a loan or other financial obligation if the primary borrower fails to make payments. This person must have good credit and be willing to accept legal responsibility for the debt, which means they will be held liable if the primary borrower defaults on their payments. The co-signer’s name will appear on all documents related to the loan, including any notices of default or collection activity.
The main benefit of having a co-signer is that it can help someone with poor credit obtain financing that would otherwise not be available. It also helps reduce risk for lenders since there are two people responsible for repayment instead of just one. However, it’s important to remember that both parties are equally responsible for repaying the debt in full and on time; failure by either party could result in serious consequences such as damaged credit scores and collections action against both individuals involved.