How does a co-signer affect a loan application?

A co-signer strengthens a loan application by adding their credit history, income, and financial standing to the borrower's profile. This can help someone with poor or limited credit get approved for a loan they otherwise wouldn't qualify for, and it often results in a lower interest rate because the lender sees reduced risk. However, the co-signer takes on full legal responsibility for the debt. If the primary borrower misses payments or defaults, the co-signer is obligated to pay, and the delinquency will damage both parties' credit scores. The loan also appears on the co-signer's credit report and counts toward their debt-to-income ratio, which can affect their ability to borrow money for themselves in the future.