Guarantor vs. Cosigner: What’s the Difference [2023 Guide]

When considering a guarantor vs. cosigner, it's important to understand the difference in responsibility – a guarantor is only expected to step up when a renter fails to pay their rent, while a cosigner takes equal liability right away. Either way, both agree that rent will be taken care of!

Some landlords may require you to have a guarantor or cosigner when you rent an apartment if your rental history, income, or credit do not meet the landlord's requirements. In this guarantor vs. cosigner guide, we’ll discuss their responsibilities and how they compare.

What is a Guarantor?

The guarantor stands ready as a financial safety net if a renter becomes unable or unwilling to pay their rent. The requirements to be a guarantor may vary but can typically be anyone, including a family member, a friend, or a third-party guarantor service. Additionally, being a rental guarantor on a lease does not entitle that person to live in the apartment with you as a tenant.

You’ll often require a guarantor if you:

• Have low income
• Lack rental history
• Have bad or limited credit

Guarantors will ideally have a steady income, stellar credit, or collateral to offer in the event of nonpayment by the primary renter.

What is a Cosigner?

A cosigner for apartment shares the burden of paying rent from from the beginning of the lease agreement. Plus, a co-signer can live as a tenant in the apartment with you, unlike a guarantor for apartment rentals. A rental cosigner is a good option if you can’t qualify for an apartment on your own.

If you’re wondering how to add a cosigner to a lease, they can typically be a friend, family member, or anyone else you know closely. The responsibilities of a co-signer include the legal obligation of all payments. Remember that if you need a cosigner, missed payments will reflect poorly on both of your credit reports.

Key Differences Between Guarantors vs. Cosigners

Here's a breakdown of the main differences between guarantors and cosigners that you should know:

Now that you know how to distinguish between the two, let's take a look at some reasons you may need a guarantor or cosigner.

Reasons to Find a Rental Cosigner or Guarantor

There are a few different reasons you may consider a co-signer or guarantor on your lease.

Cheaper Rent

In some instances, co-signers are roommates, which means they can help you save on rent every month. With the extra cash, you can ensure your monthly budget stays on track, helping you become a more financially responsible renter.

Poor Credit Score

Having a poor credit score may impact your ability to rent an apartment. However, If you can find a guarantor or cosigner willing to offer assistance, you may find your options to widen.

Low Income

Having a low income can also impact your rental capabilities. And in some cases, you may be asked to give a higher security deposit to demonstrate trustworthiness. Cosigners and guarantors can help by alleviating some of the pressure of meeting these requirements.

First-Time Renter

Guarantors are perfect for first-time renters who want to live alone but need financial support. The extra security can help you feel more confident as you manage your monthly budget and expenses.

Final Thoughts

As we can see, there are a few differences between guarantors and cosigners. However, if you are looking for someone to back you in your rental situation, both of them can help provide that extra layer of assurance to potential landlords.

No matter which route you decide to take, just remember the importance trusting the individual you choose. After that’s all taken care of, you can turn to Apartment List to start your search and work with your guarantor or cosigner to find the rental of your dreams!

FAQs

Who Can Be a Cosigner or Guarantor?

Responsible colleagues, friends, or family members, are perfect options for this role. However, since the responsibility of a guarantor and cosigner is quite large, the requirements for these individuals will likely be stricter than those of the primary renters.

Can You Be Your Own Guarantor?

It depends on the policies of your specific apartment complex or landlord, but some may allow for self-guarantorship.

Does a Guarantor Have to Have Good Credit?

Yes. Apartment guarantors must have excellent credit, as they take on significant financial responsibility.

Can You Have More Than One Guarantor

Multiple guarantors may be allowed if the tenant(s) do not meet the landlord's income, rental history, or credit history requirements. Otherwise, typically one lease guarantor will suffice.

Does a Cosigner Have to Be Present?

A cosigner may or may not have to be present when you sign your lease. Your landlord will determine whether or not this is the case, so be sure to ask.