It is potentially a large financial burden, since a co-signer accepts the same legal responsibility to pay the loan back if the borrower defaults.

In the case of a default, the co-signer usually pays back the remainder of the loan as well as any late fees or legal fees associated with the default. This can have a negative impact on the co-signer’s credit. The lender may go after the co-signer at any time, but typically they won’t go after the co-signer until the borrower defaults on the loan.

If you do agree to co-sign, see if the lender will agree to only collect from you if the primary borrower defaults. Ensure that your liability is limited only to the unpaid remainder of the loan, and not additional fees.