What does it mean to be a cosigner on a loan?

Being a cosigner on a loan means agreeing to share responsibility for the repayment of that loan. When an individual cosigns a loan, they are essentially guaranteeing that they will take on the financial obligation alongside the primary borrower. This arrangement is commonly used when the primary borrower may not have sufficient credit history or financial stability to qualify for the loan on their own. The cosigner's creditworthiness can provide assurance to the lender, increasing the likelihood of loan approval.

In this role, the cosigner's credit is at stake, and failure of the primary borrower to make timely payments could negatively impact the cosigner’s credit score as well. Additionally, the lender may pursue the cosigner for repayment if the borrower defaults, placing a financial burden on the cosigner as well. Therefore, a cosigner is not just a secondary name on the loan document but a key player who shares the responsibility of repayment. This distinct responsibility clearly aligns with the correct understanding of being a cosigner.