Whenever you are applying for any digital personal loan, the option of adding a co-borrower or co-signer might pop up. However, you will find some differences between the two. Out of all, the biggest difference between both lies in the ownership of the asset. Whenever you are co-borrowing or co-signing, you need to be careful about the various responsibilities. But before you understand the various responsibilities, you need to know the difference between co-signer and co-borrower.

Difference between co-borrower and co-signer

To put this in simple terms, the biggest difference between a co-signer vs co-borrower lies in the investment degree of the loan. To know it elaborately, learn the functions and differences between the two.


If any young person wants credits to start their business, they might need a co-signer. Parents with a good credit history can sign for a co-signer and help the child with the loan amount. The co-signer needs to have a close relationship with the primary borrower.

Work of the co-signer

They are the guarantor of the primary borrower. Needless to say, they promised to assume future responsibility for repayment if the primary borrower fails.

The risk associated with co-signing

Co-signer also takes on financial risks. They need to pay the outstanding if the primary borrower defaults.


They are also known as co-applicants. A person tends to share the liabilities while one tends to repay the loan with another person. When you are applying alone, a co-borrower helps to reassure the lenders with multiple sources of income that can go towards repayment.

Work of the co-borrower

A co-borrowing person would have to take responsibility for making payments associated with the loan amount. They tend to make payments of the loan amount on their own. In such cases, the borrowing would be quite profitable.

The risk associated with co borrowing

The biggest risk associated with co-borrowing happens to be that each of the co-borrower would be responsible for making the repayments starting from the initial stage. Every action of the co-borrower would impact the loan amount. In return, it can create a ripple effect on other borrowers.

Things to do before choosing co-borrower or co-signer

Before you choose either of the two, you need to have a candid conversation with the borrowing party. You should discuss the loan interest rates and determine whether you must get the loan or not. You can also discuss the various alternatives to the loan and check out each other’s future goals and financial picture. Only after that should you be able to choose a co-borrower or co-signer. You must do your research work before using the other. It might have the sum of its own set of protections if you are dealing with any property owner. That credit associated with it also gets impacted. Hence you must look for all the aspects before selecting anyone.

Now when you know the concept of co-signer vs. co-borrower, you must estimate whether it is going to affect your future life goals or not. When you know the risk but want to borrow your money with someone, then co-borrowing might help you. But if you want to help your loved ones while you guarantee the loan, then co-signing would be the right choice for you.