How does a guarantor differ from a cosigner?
The difference boils down to liability and ownership when it comes to assets. Cosigners names are also usually on the title of assets that they sign for like mortgages or vehicles. When you cosign a loan, it means you’re legally obliged to make payments if the primary borrower defaults on the loan.
As a loan guarantor, there’s a little bit more flexibility. Guarantors names are usually not on the title of assets and they only become liable when the lender has exhausted all means of collection against the person who borrowed the money in the first place.
Cosigners are also more common on personal and student loans, while guarantors are more common on business loans and mortgages.