Question
What is the correct definition of a cosigner for a loan? Someone who will promise to pay a loan if the borrower doesn't. Someone who will pay a loan for a borrower. Someone who will pay the electric bills for a borrower Someone who signs the loan documents.
Ask by Donnelly Wood. in the United States
Feb 26,2025
Upstudy AI Solution
Tutor-Verified Answer
Answer
A cosigner is someone who promises to pay the loan if the borrower doesn't.
Solution
The correct definition of a cosigner for a loan is:
**Someone who will promise to pay a loan if the borrower doesn't.**
A cosigner agrees to take responsibility for the loan if the primary borrower fails to make payments, thereby providing additional security to the lender.
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A cosigner for a loan is someone who promises to take responsibility for the loan if the primary borrower defaults, meaning they will cover the payments if the borrower fails to do so. This can help the borrower secure the loan by improving their creditworthiness in the eyes of the lender. Interestingly, lending without a cosigner can be a riskier venture for both lenders and borrowers, especially for those with limited credit history or lower credit scores. A cosigner essentially adds an extra layer of security for the lender, which in turn can lead to better loan terms for the borrower.
