What Does It Mean to be a Cosigner?

When you cosign with a borrower, you are making a legal commitment to pay back the loan if the borrower does not pay. You and the borrower share equal responsibility to make sure the loan is repaid.

If you're the cosigner, and any payments are late, you may also have to pay late fees or collection costs. This could have a negative effect on your credit record. The lender is able to collect payments and late fees directly from the cosigner. This means the lender can take steps to collect from you, the cosigner, before trying to collect from the borrower.