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Another person who signs your loan and assumes equal responsibility for it.

If you are applying for a loan but don’t have much of a credit history, lenders may be reluctant to give you a loan.  A cosigner can help you qualify.


When applying for a loan, the lender needs to get an accurate financial picture of you.  The lender examines your credit history, income, assets, etc.  For someone who is young or a student, there may not be much there for the lender to look at.  You may have just entered the work force so you now have an income, but still no assets and not really any credit history.  The lender needs to know a history in order to know whether or not you are likely to repay that loan.  Without a credit history, it is difficult for the lender to make the loan.


You need credit in order to get credit.  To get around this conundrum, many individuals use a cosigner.  Also known as a co-borrower, the cosigner is equally responsible for the loan.  That means if the primary borrower does not make the payments, the cosigner must or else get a negative report on his/her credit history.  Although the cosigner assumes the responsibilities of the loan, s/he does not typically get any benefit from it.  In other words, the cosigner does not get a boost to his/her credit score from the loan nor does the cosigner get to use the loan him/herself.  The primary borrower gets the loan only with the help of the cosigner.


For a first time loan applicant, a cosigner can be a necessity.  It allows the primary borrower to get a loan so that s/he can build a credit history and next time not even need a cosigner.