Co-Signing a Loan: Vouching for Someone Else's Debt
beginner A family member or friend asks you to cosign a car loan or an apartment lease. It feels like a formality — you're not the one borrowing the money, you're just vouching for someone. That framing is wrong in a way that costs real money. A cosigner isn't a witness or a character reference; a cosigner is a co-borrower, equally liable for the entire balance from the moment they sign. Two separate costs follow, and this lesson prices both. The first is guaranteed and invisible: the loan's monthly payment counts against YOUR OWN debt-to-income ratio immediately, whether the primary borrower pays every bill early or never pays at all — a cost that can quietly shrink what you qualify for on your own next loan for years, with nothing having gone wrong. The second is a real risk, not a certainty: if the primary borrower ever misses a payment, it's the same tradeline reporting to both credit files, so the cosigner's score takes the identical hit — and if they stop paying altogether, the cosigner owes the full remaining balance, which, left unpaid, doesn't sit still: interest keeps accruing on it with nobody paying it down. The simulator charts the balance a cosigner is liable for over the loan's life two ways — if the primary borrower keeps paying, and if they stop at a month you choose — so you can watch a debt that was almost paid off reverse and grow past its original size.