Who is a co-borrower in a loan context?

A co-borrower in a loan context refers to a person who is not just involved in the financial aspect of the loan, but also holds legal ownership of the property in question. This individual is typically listed as an owner on the title, meaning they have a legal claim to the property as well as a responsibility for the loan.

This arrangement benefits lenders because having a co-borrower often increases the likelihood of repayment. Since both borrowers share responsibility for the loan, their combined financial qualifications can help secure more favorable loan terms, such as lower interest rates.

In contrast, the other options present scenarios where the individual may have certain obligations or roles related to the loan but do not fulfill the complete definition of a co-borrower. For example, an individual who signs the loan agreement but is not on title lacks ownership rights to the property, while a party that guarantees the debt simply provides a safety net for the lender without a direct financial obligation or ownership stake. A primary borrower, meanwhile, is the main individual responsible for the loan but may not have another party sharing that responsibility in the same manner that a co-borrower does.