What Are Cosigner Rights?

The rights a person has after he has cosigned a loan for another party are referred to as cosigner rights. Though these rights vary from jurisdiction to jurisdiction, cosigners do not usually have many rights. Instead, the law typically focuses on a cosigner's responsibilities, such as paying the balance in the event the borrower defaults on his loan payments. If the cosigner's name is on the title for property purchased with loan money, such as a home or a car, he may have a right to the property, but this isn't usually the case.

When a person decides to act as a cosigner for another person's loan, he doesn't usually get many cosigner rights as part of the package. Instead, when he signs the agreement, he takes on the obligation of repaying the loan if the borrower fails to do so. Ideally, signing a loan contract will be the only effort a cosigner ever has to make on behalf of the borrower, but often, this isn't the end of things. Many borrowers do default on their loans, and cosigners then become just as responsible for the debt as the borrower. If the borrower doesn't pay and the cosigner doesn't have the money to pay or refuses to do so, the cosigner may face damaged credit and possibly a lawsuit, despite the fact that he hasn't financially benefited from the loan.

In some cases, the cosigner of a loan may have the right to notification if the borrower is late or fails to make a payment on his loan. This is not, however, an automatic right — it is something to which the lender must agree. If the lender does not agree to this, the borrower may share the account information and passwords so that the cosigner can call or use the Internet to check on the status of the account. In most cases, however, this is not included in any cosigner rights a person has simply based on signing for a loan. Instead, it is usually a concession a borrower or lender makes in order be helpful.

Cosigner rights don't usually include the right to any of the money a borrower gets from a loan or ownership of property purchased with the loan money. The only way a cosigner would have a right to a property would be in the event that his name was included on its title. For example, if the cosigner's name is included on the title to a house or a car, then he would have an ownership stake in it.