Co-signer, Co-borrower, Co-applicant and Guarantor: What’s the Difference?


We hear this question a lot.


The answer to this question may depend on which state you are a resident of, the specific language in the contract, and whether or not both parties are shown as owners on the title. It may not be a simple answer, but we’ll give it a shot.



A “co-signer” is normally added to a loan to improve the overall credit quality of the application. This is most common when the Primary Applicant doesn’t have enough credit established, or maybe had some kind of setback in the past. If things go well, the co-signer will probably never hear from the lender again. In less optimal scenarios, the co-signer will be responsible for the payment. Both parties’ credit reports will show the loan and payment history. While it’s most common for both to be shown as owners on the tile, depending on the state of residence, it may be an option to title only in the Primary Applicant’s name. This type of co-signing could apply to refinancing a new car, refinancing a used car, or refinancing a truck, to name a few examples.



A co-borrower usually has a direct personal interest in the loan—husband and wife purchasing or refinancing a new car is a good example of this. They are both equally responsible for re-payment, and both parties’ credit reports will show the loan and payment history. Normally both parties are included as owners on the title.

Co-signers and co-borrowers both start out as co-applicants. It’s just what they are sometimes called until the loan is approved and the contract is completed.



A guarantor, sometimes referred to as a “Third Party Guarantor” is a bit different. This is almost always a business loan with an individual—usually an officer of the company—agreeing to be responsible to make payments if the company fails to. Usually the loan does not show up on the individual’s credit report, and they have no obligation of payment unless the business stops making payments.


Which leads to popular questions such as:

“Can I add a co-applicant to get approved for a lower rate?”

“I got divorced, can I get my Ex off my loan?”

“My mortgage broker says I need to get off of my kid’s loan—can you help?


The answers are no problem, we’re here to help. It’s what we do.


Contact us and we’ll walk you through step by step.