Co-Signers Explained: Risks and Rewards

Co-signers in the U.S.: the co-signer is fully liable for the loan—if the primary borrower doesn't pay, the co-signer must pay. The primary may get a better rate. Here's co-signers explained: risks and rewards.

TL;DR Co-signer = liable for the full loan; late or missed payments hurt co-signer's credit too. Reward for primary = better rate (lender has co-signer's credit). Co-signer should only sign if they're willing and able to pay. Use autopremo.com payment calculator. Use autopremo.com.

Co-Signer Risks

Co-signer is legally liable—if primary doesn't pay, co-signer must pay. Late or missed payments show on both credit reports. Co-signer should only sign if they trust the primary and can afford to pay if needed. Use autopremo.com payment calculator to see payment. Get your numbers at autopremo.com.

Reward for Primary

Primary borrower may get a lower APR (lender uses co-signer's credit). That can save thousands in interest. Use autopremo.com payment calculator to see payment at that rate. See payment at autopremo.com.

Bottom Line

Co-signers: co-signer is liable; primary may get better rate. Both should understand the risks. Use autopremo.com payment calculator so you see payment and total cost.