Co-borrower Law and Legal Definition
A co-borrower is someone in addition to the primary borrower who accepts responsibility for repaying a debt. However, the co-borrower typically does not directly benefit from the loan. A co-borrower may also be referred to as a co-signer, co-applicant. A co-borrower is often used when the primary borrower doesn't meet elgibility requirements for a loan ,such as a poor credit record or insufficient income. A co-borrower's obligations are the same as those of the primary borrower. If the primary borrower does not repay the loan, the co-borrower accepts responsibility for repaying.
Federal law requires lenders to disclose this notice to co-borrowers:
You are being asked to guarantee this debt. Think carefully before you do. If the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to, and that you want to accept this responsibility.
You may have to pay up to the full amount of the debt if the borrower does not pay. You may also have to pay late fees or collection costs, which increase this amount.
The lender can collect this debt from you without first trying to collect from the borrower. The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, garnishing your wages, etc. If this debt is ever in default, that fact may become a part of your credit record.
This notice is not the contract that makes you liable for the debt.
