Cosign

DEFINITION of 'Cosign'

The act of signing for another person's debt which involves a legal obligation made by the cosigner to make payment on the other person's debt should that person default. Having a cosigner is way for individuals with a low income or poor/limited credit history to obtain financing.

This term is also commonly spelled "co-sign".

BREAKING DOWN 'Cosign'

A cosigner's obligation to repay debt arises only after the borrower has defaulted on the loan; however, cosigning a loan is not without risk. A person cosigning a loan should be comfortable with the borrower's ability to repay the debt.

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RELATED FAQS
  1. What are the advantages of applying for a private student loan with a creditworthy ...

    Discover how adding a creditworthy cosigner to your private student loan application can help you realize more favorable ... Read Answer >>
  2. How are my cosigners affected if I file bankruptcy?

    Learn how cosigners and guarantors are affected by bankruptcy filings and how cosigner treatment changes based on the type ... Read Answer >>
  3. Can personal loans be transferred to another person?

    Learn whether it is possible to transfer a personal loan to another person, and find out what happens when you default on ... Read Answer >>
  4. Will my student loan be canceled (discharged) if I die?

    Federal loan servicers discharge debts when borrowers die to protect co-signers and spouses, but private lenders are free ... Read Answer >>
  5. Can Sallie Mae garnish my wages?

    Discover whether or not, and why, private lenders such as Sallie Mae have the ability to garnish a defaulted borrower's wages. Read Answer >>
  6. Does cosigning a loan affect a credit score?

    Find out what can happen to a credit score when a cosignor must take over a debt that he or she cannot afford and what collection ... Read Answer >>
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