When you co-sign a loan in Canada, you take on legal responsibility for the debt, and federal disclosure rules give joint borrowers the right to information about the loan. The FCAC explains what lenders must disclose.

Information the FCAC highlights for joint borrowers and co-signers

Disclosure point	What it generally means for a co-signer
That you are a joint borrower	The lender should make clear that you are taking on responsibility for the debt, not simply providing a reference.
The terms of the credit agreement	You should be able to see the amount, the cost of borrowing, the term, and the payment obligations.
Information about the account	Joint borrowers are generally entitled to information the lender provides about the credit agreement.
What happens on default	The lender can generally pursue a joint borrower for the balance if the primary borrower does not pay.

Co-signing a loan in Canada is not just vouching for someone. A co-signer is a joint borrower, which means the lender can generally pursue the co-signer for the full balance if the primary borrower does not pay. Because the stakes are high, federal rules require lenders to disclose information to joint borrowers so they can understand what they are signing. This page summarises the disclosure rights the Financial Consumer Agency of Canada highlights, explains why they matter, and lists the questions to ask before you sign.

What joint borrower means

In a joint-borrower arrangement, two or more people are responsible for the same debt. The primary borrower is the person the money is intended to benefit, and the co-signer is the person who supports the application, often to help the primary borrower qualify. Legally, however, the co-signer is usually a borrower too. That means the debt can appear on the co-signer's credit report, the lender can generally collect from the co-signer, and the co-signer's own borrowing capacity can be affected.

The Financial Consumer Agency of Canada publishes a dedicated page on disclosure of information to joint borrowers. It explains that lenders must give joint borrowers certain information about the credit agreement. The exact obligations depend on the type of lender and the rules that apply to it, so the practical step is to ask the lender which disclosures you will receive and when.

Disclosure rights the FCAC highlights

The FCAC's guidance focuses on making sure a joint borrower is not left in the dark about a debt they are responsible for. In general terms, the lender should make clear that you are being asked to take on responsibility for the loan, provide the key terms of the agreement, and give joint borrowers information about the account as it progresses. The table on this page summarises the main disclosure points in plain language.

These rights matter because a co-signer's exposure can change over time. If the primary borrower misses payments, changes the terms, or renews the loan, the co-signer's obligation may be affected. Disclosure is what allows the co-signer to notice a problem early rather than discovering it after a collections call. New Brunswick's Financial and Consumer Services Commission also publishes a plain-language guide on what to know before co-signing a loan.

Why disclosure matters to a co-signer

A co-signer who does not receive information is exposed to two risks at once: the risk that the borrower defaults, and the risk that the co-signer does not find out until the debt has grown. Late payments can add interest and fees, and a default can lead to collection activity that names the co-signer. Access to statements, notices, and changes to the agreement gives the co-signer a chance to act.

It is also worth understanding that a co-signer generally cannot control the borrower's behaviour. The co-signer cannot force the borrower to pay, and the co-signer cannot usually change the loan terms unilaterally. What the co-signer can do is ask for information, keep records, and raise concerns with the lender promptly. If the relationship allows it, the co-signer and borrower should agree in advance how payments will be made and what happens if the borrower falls behind.

Questions to ask before you co-sign

1. Am I being added as a joint borrower or as a guarantor, and what is the difference in this agreement?
2. What is the total amount borrowed, the cost of borrowing, the term, and the payment schedule?
3. Which disclosures will I receive, how often, and by what method?
4. What happens to my obligation if the borrower misses a payment or defaults?
5. Can the loan be renewed or increased without my consent, and would that change my exposure?
6. Is there any process to be released from the loan, and what conditions apply?
7. Will the debt appear on my credit report, and how is that reported?

What this means in practice

The disclosure rules are a protection, but they are not a substitute for reading the agreement. Before signing, ask for the documents in writing and keep copies. Confirm how you will receive statements and notices, and make sure your contact information is current with the lender. If you are co-signing for a family member, it is reasonable to agree on a plan for payments and to revisit it if circumstances change. Common mistakes include relying on a verbal explanation, assuming the borrower will always pay on time, and failing to check whether the lender offers any release process.

• Do not sign without seeing the written terms and the total cost of borrowing.
• Do not assume the lender will contact you before taking collection action.
• Do not ignore statements; open and review them.
• Do not co-sign for more than you could realistically repay.
• Do not treat a release process as guaranteed; confirm whether one exists.

Disclosure is not a formality. It is the mechanism that lets a joint borrower see the size of the obligation, the cost of carrying it, and the consequences of default before those consequences arrive. A co-signer who understands the disclosures is in a much better position to decide whether the risk is acceptable and to monitor the account afterwards. A co-signer who does not is relying on the borrower's good behaviour and on the hope that nothing goes wrong.

In practice, the disclosures also give the co-signer a paper trail. If the lender later claims that the co-signer was informed of a term, the documents show what was actually provided. Keeping copies of everything, including statements and notices, is therefore part of protecting yourself. It is also sensible to confirm your contact details with the lender so that notices reach you and not only the primary borrower.

Remember that the disclosure rules are general and apply differently depending on the lender and the product. A bank, a credit union, a finance company, and a payday lender are not all governed by the same rules. Ask the specific lender what it will provide, in what form, and how often, and keep those answers with your copy of the agreement. If you are ever unsure about the meaning of a clause, ask for it in plain language or seek independent advice before you sign.