Get Details About Joint Personal Loan With Co-applicant

More than half of loan rejections in India are due to poor or insufficient credit history. Besides your credit score or history, your Personal Loan application can also be rejected because of low income. In these situations, the best way to access funds is to apply for a joint Personal Loan and add a co-applicant. In this blog, we will understand everything you need to know about a joint Personal Loan.

Who is a Co-applicant?

A co-applicant applies for a Personal Loan along with the primary borrower, helping to improve personal loan eligibility . In India, co-applicants are equally responsible for repaying the loan, just like the primary borrower. You can add your spouse, parents, siblings, business partner, or a close family member.

• A co-applicant is part of the application process.

• Loan repayment responsibility lies with both the primary borrower and the co-applicant.

• If the primary borrower fails to repay, the co-applicant is still legally liable for repayment.

• Adding a co-applicant strengthens the applicant's profile

A joint online loan ensures that you get access to funds, especially when your credit score is low. However, you must choose an individual with a high credit score. This not only strengthens your Personal Loan application but also helps you get a lower interest rate.

What is a Joint Personal Loan?

A joint Personal Loan involves obtaining a loan with a co-borrower, someone who shares the same repayment responsibility. A joint loan is ideal for borrowers with lower credit scores or incomes, making it challenging to qualify on their own.

• All applicants share equal responsibility for repaying the Personal Loan.

• Banks and Non-Banking Financial Companies (NBFCs) consider the income of both the primary applicant and the co-applicant or co-borrower.

• If one applicant has a poor credit score, the other applicant's strong profile helps qualify for the loan.

Adding a co-applicant with a stronger credit history or higher income can help you meet the loan eligibility criteria and secure more favourable terms. You can also enjoy a lower annual percentage rate or a higher loan amount.

Also Read: Importance of Using an EMI Calculator Before Taking a Personal Loan

Benefits of Adding a Co-application in a Personal Loan

Here are all the benefits you get access to when you add a co-applicant to a Personal Loan:

• Improved Eligibility: Combining incomes for a joint personal loan can significantly increase loan eligibility.

• Lower Debt-to-Income Ratio: Co-borrowing reduces the DTI ratio, improving approval chances.

• Increases Approval Chances: A stronger credit score improves loan approval odds.

• Competitive Interest Rate: Couples or family members applying together can secure better rates.

• High Loan Amount: Combined income and credit score qualify you for a higher loan amount.

• Tax Advantages: Only if the loan is used for business purposes. Personal consumption loans do not qualify.

• Reduced Total Interest Payable: Lower interest rates reduce EMI burden.

Alo Read: Check Your CIBIL Score Online To Apply For A Personal Loan

How to Apply for a Joint Personal Loan Online

Here are the steps you can follow to apply for a joint Personal Loan:

• Choose a Lender: You must first choose a reliable lender from different financial institutions that has a reputation for offering a joint Personal Loan with favourable terms.

• Confirm Your Eligibility: After choosing a lender, ensure you meet its eligibility criteria, including minimum income requirements and credit score requirements.

• Apply for the Personal Loan: Next, fill out a joint loan application form with your basic details, such as name, number, PAN card, and Aadhaar.

• Submit Documents: You must now provide documents of both the primary borrower and the co-applicant, including identity, address, KYC, and banking.

• Submit the Application: After submitting the documents, apply and wait for the approval.

• Approval and Disbursal: If everything is in order, the lender will approve the loan and disburse the amount into your bank account.

Note: Both applicants must sign the loan agreement, confirming joint liability.

Tips for Getting Approved for a Joint Personal Loan

Here are the tips you can follow to improve your chances of joint Personal Loan approval:

• Select a co-applicant with a good credit score

• Keep the Debt-to-Income (DTI) Ratio low

• Both applicants must have a steady income

• Improve your credit score

• Increase income and savings

Also Read: How Can A Small Personal Loan Help You this Christmas?

To Conclude

Applying for a joint Personal Loan increases your approval odds. It also helps you get a Personal Loan with a low interest rate, flexible repayment options, and a longer tenure. However, to access all this, you must ensure that a co-applicant has a strong credit score and income.

At Poonawalla FinCorp, we are committed to making Personal Loans available and accessible to all. This is why we not only offer affordable loans but also keep the eligibility criteria simple. Apply for a Personal Loan with Poonawalla Fincorp now to get up to ₹50 lakh at an interest rate starting from just 9.99% p.a.

FAQs

Who can be a co-applicant for a joint personal loan?

A co-applicant can be a spouse, parent, sibling, or any individual with a good credit score and stable income.

Does being a co-applicant affect your credit?

Yes. Since co-applicants are jointly liable, repayment behaviour directly impacts their credit score throughout the loan tenure.

Can I add a co-applicant for a Personal Loan?

Yes. Eligible co-applicants include:

• Spouse

• Parents

• Close Family Member

• Business Partner

What is the difference between a co-borrower and a co-applicant?

In practice, Indian lenders treat both as the same - jointly liable for repayment. The distinction is largely semantic.

Can a Personal Loan be in joint names?

Yes, a Personal Loan can be in joint names. Both individuals must meet minimum eligibility criteria.

Are co-applicants responsible for repayment?

Yes. Co-applicants are equally responsible for repayment along with the primary borrower.

What are the responsibilities and risk associated with being a co-applicant in a joint personal loan?

Joint loans can lead to strained relationships due to financial disagreements or unexpected events.