A cosigner is a term used to identify an additional source of repayment on a loan. A cosigner can aid a borrower by increasing the amount of principal for which he or she is eligible. A borrower may need a cosigner if he or she has a low income or minimal credit history.
An example of when an individual may need a cosigner is when he or she is enrolling at a university and requires financing to pay tuition. Because that individual may just be graduating from high school and has a limited history of credit or none at all, he or she will require a cosigner to acquire financing.
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