What are the risks of cosigning a loan for someone?

Cosigning means you're legally responsible for the entire debt if the primary borrower doesn't pay — not just a character reference, but a full backstop. The loan appears on your credit report, so every late payment hurts your score, and the balance counts against your debt-to-income ratio, which can block you from qualifying for your own mortgage or car loan. If the borrower defaults, collectors can come after you, and you may not even be notified until it's badly delinquent. You generally can't easily remove yourself once you've signed. Only cosign if you can afford to pay the whole loan yourself and you fully trust the person — and even then, treat it as money you might lose. Ask whether the loan has a 'cosigner release' option after a streak of on-time payments. When possible, gift or lend cash directly instead of cosigning.