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. 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 >>
  2. 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 >>
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