How are borrowers/co-borrowers, cosigners, and guarantors different?

A borrower and co-borrower receive direct benefits from the loan proceeds.

A cosigner is an accommodation party who does not receive any direct benefit from the loan proceeds. An accommodation party or maker commits his/her creditworthiness and becomes personally liable to effectively guarantee the repayment of the loan. A cosigner signs the note as a cosigner, or endorses the note (similar concept to endorsing a check).

A guarantor is similar to a cosigner, but a guarantor does not sign the note. Instead, a guarantor signs a separate guaranty agreement. Traditionally, a guarantor was secondarily liable, but since the 1980’s, guaranty agreements are drafted so the guarantor is primarily liable.