Guarantor vs Co-signer: What’s The Difference
When applying for a loan, rental agreement, or credit-based contract, lenders want assurance that they will be repaid. If a borrower does not meet income or credit requirements, lenders may require additional support typically in the form of a guarantor or a co-signer . These roles can help a borrower qualify when they otherwise wouldn’t, but many people confuse the two. So, Guarantor vs Co-signer: What’s The Difference ? The answer lies in timing, legal liability, and financial exposure. Understanding the difference can help borrowers and supporters make informed, low-risk decisions. Who Is a Co-signer? A co-signer is someone who signs a loan or lease agreement along with the primary borrower. They agree to share equal legal responsibility for the loan, from the moment it is approved. If the borrower cannot make payments, the co-signer is equally liable to repay. This role is typically required when the borrower: Has little or no credit history Has a low credit score Has a low or ...