At a Glance

When agreeing to become a co-signer or looking into taking on a co-signer, it’s crucial to understand the rights that come with this important role. Any co-signer takes on a level of risk and knowing your rights in the event that risk increases can help you save time and money.

In this article, you’ll learn:

What is a co-signer?

A co-signer is a person who agrees to take on ownership of the debt an individual borrows in the event that person is no longer capable of paying. This co-signer does not gain access to any funds from the loan. Essentially, a co-signer agrees to give their name and credit history as support for the person trying to borrow the loan.

When would someone need a co-signer?

In most cases, a co-signer may be needed when a person does not qualify for a loan based on their own financial history. This can be due to a rocky background with credit, simply not having a high enough income for the loan, or a violation of any other loan requirements. If the co-signer you wish to bring on meets those requirements, a lender may be willing to give you the loan.

A common example of when a co-signer serves as a guarantor could be a child purchasing their first apartment or car and their parent acting as the co-signer. Most young adults have limited history with credit, but the lengthy history of their parents often bolsters this limited history.

Related: Best Personal Loans with a Co-signer

Co-signer vs co-borrower

The primary difference between a co-signer and co-borrower is that a co-borrower is entitled to equal access to the asset in most cases. In regard to taking on a loan, both parties would have equal claim to funds from a loan. When purchasing a vehicle or a house, both borrowers will likely have their name on the title of the vehicle or house.

A co-signer will simply be responsible for paying debt off if the primary lender cannot meet their obligations. Of the many cosigner rights, access to the asset is not one.

Related: Co-borrower vs Co-signer

Responsibilities of a co-signer

Whether you are the one choosing to be a co-signer or attempting to bring somebody on, outlining the important steps of a co-signer can help make your loan application process smoother:

1. Gathering the required information to apply

As a co-signer, you will need to provide all of the same information as the borrower. This information encompasses both personal and financial items, typically including:

  • Current and past address
  • Different streams of income
  • Total gross income
  • Social security number

By gathering some of the above documents in advance of applying, you can speed up the overall process so that the borrower can receive their funds quicker.

2. Potentially repaying the loan debt

One responsibility of co-signer borrowers is repaying the loan if the borrower cannot meet payments. Regardless of why the borrower is failing to meet their obligation, whether financial or personal, it is the job of the co-signer to take on the responsibility for the debt. Not doing so will damage both parties credit scores and may result in legal repercussions.

3. Monitoring loan transactions

While not required as a co-signer, monitoring loan transactions is a responsible strategy for ensuring the primary borrower is staying on top of their obligations. Of the many rights of a cosigner, access to information regarding the loan is one that is available to you.

4. Impact on co-signer credit score

Be aware that if both you and the borrower cannot meet the obligations of the debt that is being taken on, both parties’ credit scores and overall credit history will be rapidly damaged. To maintain a strong credit score, immediately pick up responsibility for the loan if the primary borrower cannot meet their obligations.

Rights of a co-signer

In regard to a cosigner vs. coborrower, the former has far less rights than the latter. As a co-signer, you are a guarantor who does not have a claim of ownership to the asset. Here are highlights of the rights for cosigners:

1. Co-signers don’t own the asset

The biggest right of a co-signer, or lack thereof, is that a co-signer does not have any ownership over the asset. Whether it is simply a loan, a vehicle, a home, or anything else, you only have responsibility for the asset, rather than a right to use that asset.

2. Co-signers can be removed from the loan

At any point, co-signers can be removed from a loan. However, this may cause a lender to reevaluate the primary borrower and terms of the loan to see if there is substantially more risk by the co-signer leaving the agreement.

3. Co-signers can face collection before the primary borrowing

One particular risk and unfortunate right of being a co-signer is that you can potentially face collection services from debt collectors prior to the actual borrower. This means that they may come for some of your assets as a form of repayment for the loan that was not paid back instead of the borrower’s.

Things to consider before becoming a co-signer

As evident from the above, there are a number of risks associated with becoming a co-signer or bringing a co-signer onto a loan. There are very few loan cosigner rights, which makes this decision all the more important:

1. The type of loan

Consider the terms of the loan, such as the total loan amount, monthly repayment amount, and the total length of the loan. Highly consider whether or not this loan is something you can actually afford in the event you are responsible for taking on the responsibility for the loan. Certain types of loans may also require additional collateral beyond a co-signer, and the co-signer themselves may be required to present some type of collateral as well.

2. Your own financial situation

One major factor to consider before becoming a co-signer is your personal financial situation. You should have no doubts about your ability to repay the loan in the event that it is required. Ensure your income stream is steady and that you have enough to cover both the loan amount and continue to save money.

3. Relationship with the primary borrower

Considering that all of the risk associated with being a co-signer is contingent on the borrower maintaining meeting their loan obligations, it’s important to trust the borrower. Even if they are a close family member or friend, have an honest conversation with them about their finances so that you can feel confident in their ability to repay the debt.


To become the primary borrower, a co-signer and the current borrower will likely have to refinance the loan to change the name on it. A co-signer is still not the primary borrower even if they are forced to take on responsibility for the loan.

Nearly all types of loans are capable of being co-signed. Speak with a lender if this is an option you are interested in to see if they accept a guarantor on their applications.

In most cases, the only way your credit will be hurt as a co-signer is if the borrower is unable to pay the loan and you do not take over responsibility for it. In this situation, the loan will go into default and your credit score, along with the score of the borrower, will be negatively impacted.

Before agreeing to co-sign a loan, evaluate your own financial situation, your relationship to the borrower, the rights associated with being a co-signer, and anything else that can help educate your decision. It’s important to consider that you will be entirely responsible for the loan in the event the borrower cannot repay.

Yes, a co-signer can get out of a loan but only the borrower can submit this request. It will also require the borrower signing off on the request before the co-signer is actually released and, at the end of the day, it is still the lenders decision.

Yes, as a borrower you can submit a request to release the co-signer from their responsibilities. However, for the lender to approve this request, you will need to demonstrate that you are more than capable of meeting all obligations with the loan without any assistance.