Legal Definitions - cosign

Definition: When someone cosigns, they sign a document with another person who is borrowing money or leasing something. By cosigning, the person agrees to share the responsibility of paying for the item or service. If the primary borrower cannot pay, the cosigner will be responsible for paying instead. Cosigners are often used for apartment leases, car leases, and credit card applications to provide the lender with some security that they will be able to financially recover for the good. If the primary borrower stops making payments and the cosigner refuses to make payments, the lender may legally go after both parties and as a result, the cosigner’s credit could suffer.

Example: Sarah wants to lease a car but doesn't have a good credit score. Her friend, John, agrees to cosign the lease with her. This means that if Sarah can't make the payments, John will be responsible for paying them instead. By cosigning, John is helping Sarah get the car she needs, but he is also taking on some risk.

Example: Mark wants to rent an apartment, but the landlord is worried that he won't be able to pay the rent on time. Mark's parents agree to cosign the lease with him. This means that if Mark can't pay the rent, his parents will be responsible for paying it instead. By cosigning, Mark's parents are helping him get the apartment he wants, but they are also taking on some risk.

These examples illustrate how cosigning works. When someone cosigns, they are agreeing to take on some of the responsibility for paying for something. This can be helpful for the primary borrower, but it also means that the cosigner is taking on some risk. If the primary borrower can't pay, the cosigner will be responsible for paying instead.