What is a Cosigner?

Playlist: Debt and Borrowing Money

What is a Cosigner?

A cosigner is a person who is an advocate for you when borrowing a loan.

They are also responsible for paying the loan if you fail to do so.

You may need a cosigner for a loan if you do not have a history of credit, or if your credit history is not good.

A lender will also look at your income compared to the amount of debt you have, known as your debt-to-income ratio.

A cosigner would need to have a good credit history and enough income to sustain the loan.

A cosigner can be a family member or friend.

This person would be taking a risk on your behalf.

If you don't make good on your loan and make payments, then your cosigner becomes responsible for the loan.

Whether you are taking out a loan on your own or with a cosigner, it is important to make a good financial decision and you are able to pay the loan back.

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What is a Cosigner?

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