Equal rights: The co-borrower has equal rights to the car as the primary borrower. This means the co-owner must be involved in the sale or transfer of the car. Insurance: Even if the co-owner doesn't use the car, they will likely need to be on the insurance policy. This can mean higher costs for both involved.
A co-borrower can take the car, but not without your permission. For example, if the co-borrower wants to take the car, sell it, or trade it in, you will need to sign off on it before the co-borrower can proceed. When it comes to signing the title to sell or trade in a car, there might be exceptions.
The terms co-borrower, co-buyer, co-applicant and joint applicant all basically refer to the same role — someone who shares in equal ownership of the loan and car. They are also equally responsible for making car payments from the start.
Rights of co-borrowers
Each person owns a percentage of the property based on how much money she invests. All areas of the property are accessible to each individual. Also, each owner decides who receives her share of the property when she dies.
While you don't necessarily have the same rights to the vehicle as the primary borrower, you – as the co-signer – are equally responsible for ensuring the loan is paid back. If the primary borrower doesn't make their monthly loan payment, you will be asked to make the payment.
You have a few options if you've co-signed for a loan and the primary borrower is behind on payments. It's most important to understand that you do not have the right to repossess the car yourself. Instead, you'll need to either work something out with the primary borrower or continue making the payments to the lender.
The Bottom Line
One of the risks of cosigning a loan is that at some point you may no longer want to have your name on the loan. Fortunately, you can have your name removed, but you will have to take the appropriate steps depending on the cosigned loan type.
When you work with a co-borrower, lenders will view their financial details alongside yours, giving both equal weight. Once your mortgage application is approved, your co-borrower will have the same legal rights to the property and the same mortgage responsibilities as you..
A co-borrower is a co-owner of the property. The co-borrowers name would be on the title of the home, right alongside yours. Beyond having their name on the title, co-borrowers' assets, credit history, employment history, and debts are assessed as they are also applying for the home loan with you.
Generally, co-borrowers share the title of the home. But this isn't always the case since the loan and the title are separate. Be aware that if you're a co-borrower and your name isn't on the title, you'll still be responsible for paying off the mortgage – but won't have the right to use the house.
A co-borrower has more responsibility (and ownership) than a co-signer because a co-borrower's name is on the loan, and they are expected to make payments. A co-signer only backs your loan and will not need to make payments unless you are unable to.
Both a co-borrower and a cosigner are legally responsible for a loan, but a co-borrower shares ownership in the property the debt is used to finance. A cosigner guarantees repayment of a loan to help a borrower who wouldn't qualify on their own but doesn't share ownership of the property.
The loan contract often includes a clause covering the death of one of the parties, such as the co-signer. In such cases, the deceased individual's estate may be the new co-signer. If the loan is in default, the lender could pursue repayment from the estate's assets — and from the living borrower.
You can file an action in small claims court (in some states such as Georgia this is the Magistrate's Court) to recover any amount you have to pay on the borrower's debt, plus court costs. If you succeed, you may be able to recover some or all of your loss.
It is important to note, however, that a co-borrower has equal ownership in the vehicle. Be sure that you and your co-borrower understand and agree to any terms before applying. If your co-borrower ever wants to remove themselves from the loan, you must refinance again to remove them from your policy.
THE BANK AND THE COURTS DO NOT CARE. All they care about is that YOU signed the loan, so as far as they are concerned YOU owe the money and you owe ALL of the money to the bank, and the only way to change that is to pay the money back. The buyer can get another cosigner or you can sell the car to pay off the loan.
She is a regular contributor to Career Tool Belt and Career Cloud. Joint borrowing is the process of taking out a loan in partnership with another person, often known as a co-borrower. Joint borrowing can open access to greater loan amounts and better loan terms, although there are certainly risks involved.
One option that's available: A cosigner does have the right to sue the primary borrower to recover the funds spent making loan payments. It will then be up to the court to decide whether to award any damages to the cosigner. When deciding whether to sue, take court costs into account.
Can a cosigner take you to court? If you're the primary borrower on a debt, your cosigner can take you to court for: Recovery of money paid: they can sue you to recover the money they've paid towards the loan. Fraud: they can sue you if you signed their name to the loan without their permission.
If you and your significant other purchased the car together and both of your names are on the title (and on the lease), you may need to sell the car or have one owner buy out the other's share. Otherwise, you still legally share ownership of the car and must work together on splitting its use.
If the vehicle is solely titled in your name and you have a key and can peacefully enter it, you may have a right to get it. Now, it is a civil matter, if the police will not get involved and another option would be to file a civil lawsuit against him, for a replevin action and sue, to recover it.
A cosigner can, more or less, be removed at any point during the lifetime of a loan. How you choose to go about it and your financial situation — as in the case of refinancing the loan — may impact your ability to take advanatage of some options, though.
No. Cosigning a loan doesn't give you any title, ownership, or other rights to the property the loan is paying for. Your only role is to repay the loan if the main borrower falls behind on the payments or defaults.