How To Get A Personal Loan With A Co-Applicant

Co-Applicants in a Personal Loan

It is very important to understand the meaning of co-applicant. A co-applicant is a person who applies for a loan along with the primary borrower. They share the responsibility of repaying the loan amount and are equally liable in case of default.
 
Having a co-applicant for a Personal Loan can increase your chances of approval as it helps mitigate the risk of lending to a single borrower. The co-applicant must have a good credit score and income to support the loan application. The co-applicant can be a spouse, parent, sibling, or close friend.

Also Read: How Can I Get A Loan For Personal Use  

Factors To Consider Before Taking a Personal Loan With a Co-Applicant

Before applying for a Personal Loan with a co-applicant, there are several factors that you must consider, including:

1. Credit Score

   The primary borrower and the co-applicant must have a good credit score to be eligible for a Personal Loan. A good credit score indicates a higher level of creditworthiness and helps lenders assess the risk of lending money. 

2. Income

   The income of the primary borrower and the co-applicant determine the sanctioned loan amount and EMI amount. It is important to have a stable income source to ensure timely loan repayment.

3. Debt-to-Income Ratio

   The debt-to-income ratio is the percentage of your monthly income that goes towards paying debts. Maintaining a low debt-to-income ratio is important. The borrower ensures that the loan amount is affordable and timely repayable.

4. Purpose of Loan

   Having a clear purpose for taking a loan with a co-applicant is important. You should avoid taking a loan for unnecessary expenses and only borrow what is necessary.

5. Repayment Plan

   Before taking a loan, it is essential to have a repayment plan in place. It would help if you discussed how to repay the loan, including the monthly instalments amount, loan duration, and other fees. 

Advantages of Having a Co-Applicant

Having a co-applicant for a Personal Loan can offer several advantages, including:

1. Increased Eligibility

   A co-applicant can enhance the primary borrower's creditworthiness, making them eligible for a higher loan amount.

2. Lower Interest Rates

   Lenders will likely offer lower interest rates to borrowers with a co-applicant as it reduces risk.

3. Better Repayment Terms

   Co-applicants can improve the loan's repayment terms, making it more affordable.

Eligibility Criteria for Taking a Loan with a Co-Applicant

Borrowers must meet the following eligibility criteria to qualify for a personal loan when applying for the same with a co-applicant: 

1. Age

   The co-applicant should be 21 years of age.

2. Relationship

   The co-applicant must have a family relationship with the primary borrower. Co-applicant can be spouses, parents, or siblings.

3. Income

   The co-applicant's income should be sufficient to support the loan repayment and the primary borrower's income.

4. Credit Score

   The lender also considers the co-applicant's credit score. A good credit score increases the chances of loan approval and may result in better loan terms and interest rates. 

Documents Required for Taking a Loan with Co-Applicant

The co-applicant must submit all the necessary documents required by the lender, such as:

• Identity proof such as Aadhar card, PAN card for KYC
• Address proof such as electricity bills
• Income proof such as salary slips of the last six months and Form 16
• Passport-size photographs
• Bank statements

How to Apply for a Personal Loan With a Co-Applicant

Follow the steps given below when applying for a Personal Loan with a co-applicant from Hero FinCorp:

• Begin with an online application that will require you to enter details 
• Upload your income proofs and basic KYC documents.
• If your information meets set eligibility requirements, one of the lending institution’s representatives will contact you for the completion of the next steps.
• After completing the entire process, the funds will be credited shortly to your account.

Benefits of Our Loan

Apply for a Personal Loan from Hero FinCorp and get a hassle-free application and approval process. Our Loans offer a variety of benefits, such as:

• Higher loan amounts up to Rs 5 lakh
• Flexible usage
• Collateral-free loans
• Competitive interest rates

Conclusion

If you are considering a Personal Loan for low CIBIL, then a co-applicant is a good option to apply for a loan with. Taking a Personal Loan with a co-applicant can be a smart financial decision, provided you understand the risks and have a clear repayment plan.

By choosing the right co-applicant, meeting the eligibility criteria, and carefully considering the factors involved, you can secure a loan that meets your needs and helps you achieve your financial goals.

Frequently Asked Questions

Who is a co-borrower in a personal loan?

A co-borrower, also known as a co-applicant, is an individual who applies for a personal loan alongside the primary borrower. Both applicants share equal responsibility for repaying the loan.