Does cosigning a loan affect your credit?
It can. When you cosign, the debt is yours, too, and it can count against you when you apply for credit yourself. If the borrower stops paying, the lender can come to you for the full amount.
Does cosigning help the borrower?
Often. A cosigner with steadier income or stronger credit can help someone get approved, or get better terms, than they could on their own.
Can a cosigner be taken off a loan?
Usually only when the loan is paid off or refinanced in the borrower’s name alone. Plan on being responsible for the whole term.
What should you know before you cosign?
Federal rules require lenders to give cosigners a written notice explaining that they’re responsible if the borrower doesn’t pay. Read it. Only cosign for an amount you could pay yourself.
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