What Is the Difference Between a Co-Borrower and a Co-Signer?
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.
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.