Q:

What is the difference between a co-borrower and a co-signer?

A:

Quick Answer

The difference of a co-borrower and a co-signer is that they don't have the same benefits, but they may have the same responsibilities in some situations. The income of the co-borrower is usually considered during the loan application while the income of the co-signer is never considered, as stated by Auto Credit Express.

Know More

Full Answer

When applying for a loan, a person can opt to share the responsibility of the debt with another person, who can either be a co-borrower or a co-signer. This can be necessary when the applicant lacks enough credit history, making it difficult for him or her to get a mortgage or a student loan.

In some situations, being a co-borrower in a loan application is better than a co-signer because co-borrowers reap more benefits. They are able to directly benefit from the loan. If the borrower fails to pay the loan, the co-borrower enjoys the benefit of sharing the car or the home bought using the loan.

During the loan application, the assets, income and credit history of the co-borrower are taken into account to assist the borrower. All these are combined together with the borrower's income and assets to meet the loan criteria, as stated by Total Mortgage.

Learn more about Insurance

Related Questions

Explore