Personal Loan With A Co-Applicant

Get Details About Joint Personal Loan with Co-Applicant

March 19, 2022 • 9497 views

Taking a Personal Loan is a widely chosen way to secure extra funds without the need for collateral. A popular approach evolving in India involves adding a co-applicant to the loan application and creating a joint Personal Loan.
Many couples often choose to put their spouse as a co-applicant, strengthening their case for loan approval. In this guide, we will explore the co-applicant mechanism and understand why applying for a Personal Loan jointly can be a favourable choice. Keep reading!

Who is a Co-applicant? 

A co-applicant is a person who can take responsibility for a Personal Loan along with you. Getting a Personal Loan with a co-applicant has been particularly popular among the Indian population, with a spouse being the preferred choice. This means the eligibility of both applicants will be assessed and verified by lenders for a joint Personal Loan.  

What is a Joint Personal Loan?

A joint Personal Loan involves obtaining a loan with a co-borrower, someone who jointly owns the loan and shares the responsibility for repayment. This type of loan is beneficial for individuals with lower credit scores or incomes, making it challenging to qualify on their own. 
Bringing in a co-borrower with a stronger credit history or higher income can potentially secure more favourable terms. You can also enjoy a lower annual percentage rate or a higher loan amount.

How is Co-borrowing Helpful?

Co-borrowing or getting a Personal Loan with a co-applicant is helpful in various ways. Some of the key benefits of co-borrowing are as follows: 

  • Better Eligibility  

Having both applicants’ incomes considered boosts eligibility, enabling access to higher Personal Loan amounts. Couples, especially if both partners work, can benefit from better loan terms.

  • Lower Debt to Income Ratio

One of the key issues in Personal Loan approval is the debt-to-income ratio. Co-borrowing with a spouse helps lower this ratio, increasing approval chances, as lenders often prefer a DTI ratio below 30%.

  • Helps in Supporting Credit Score

Co-borrowing plays a crucial in improving your credit score. If one applicant has a stronger credit score, it increases the chances of loan approval. However, if the partner's credit score is lower, adding them as a co-applicant might hinder your chances of loan approval.

  • Better Interest Rate

A couple applying as co-applicants can potentially secure better interest rates. Lenders consider factors like income and credit score of both partners and agree to negotiate on interest rates due to improved repayment confidence.

What are the Benefits of a Joint Personal Loan for Couples?

There are several advantages of having a co-applicant on a Personal Loan. Some of the major benefits are as follows: 

  • High Loan Amount

Combining your income and credit score with a co-applicant may qualify you for a higher loan amount compared to applying as a single applicant.

  • Favourable Interest Rates

A joint Personal Loan often comes with better interest rates, as lenders perceive co-applicants as low-risk borrowers than individual borrowers.

  • Tax Advantages

Depending on the loan's purpose, you might be eligible for tax benefits. For instance, using the loan for home improvements could allow you to deduct the interest paid from your taxes.

  • Convenience

Applying for a joint Personal Loan is more convenient than individual loans. One application suffices, and the loan EMI payments can be divided between the applicants.

  • Flexible Loan Tenure

Those opting for joint loans from NBFCs like Poonawalla Fincorp can get Personal Loans with a flexible repayment period of up to 60 months (5 years).

ALSO READ :- Check Your CIBIL Score Online To Apply For A Personal Loan

How to Apply for a Joint Personal Loan Online?

  • Step 1: Visit the lender’s website and click on 'Apply Now' to fill out the loan application form.
  • Step 2: Complete the form by providing the necessary details and attaching the required documents.
  • Step 3: Click 'Submit’ for further assessment and verification.

Tips for Getting Approved for a Joint Personal Loan

To enhance your chances of joint Personal Loan approval when currently not meeting eligibility criteria, consider the following tips:

  • Improve Your Credit Score

Boost your credit score by paying your dues on time, reducing credit utilisation, and correcting any errors in your credit report.

  • Increase Income and Savings

Work on raising both applicants' income and savings before applying for the loan. This might involve taking on part-time work or cutting unnecessary expenses.

  • Explore Loans Without Income Proof

If meeting income requirements is challenging, apply for a Personal Loan that does not demand income proof. These loans rely on factors like a high credit score instead of income documentation.

How is a Joint Personal Loan EMI Calculated?

To calculate the EMI for a joint Personal Loan, use the formula:
EMI = [P x R x (1+R) ^N] / [(1+R) ^N-1]

  • P is the principal loan amount.
  • R is the interest rate, expressed as a percentage.
  • N is the loan tenure.

It is essential to note that a joint Personal Loan can be foreclosed before the tenure ends, but additional charges may apply. 

To Conclude

Applying for a joint Personal Loan increases the likelihood of approval and allows sharing of the repayment responsibility with a co-applicant. It allows both you and your partner to enjoy the benefits of the loan without any financial stress. You can also use a Personal Loan eligibility calculator to determine your EMI amount and effectively plan your finances.

Frequently Asked Questions About Joint Personal Loan

1. Does being a co-applicant affect your credit?
Being a co-applicant on a loan does not impact your credit score. However, if the main account holder fails to make timely repayments, it could hurt your credit score.

2. Can you add a co-applicant for a Personal Loan?
Yes, you can add a co-applicant for a Personal Loan. Generally, the spouse is a co-applicant for a Personal Loan. However, you can also add a friend or family a co-applicant for a Personal Loan as long as they meet the eligibility criteria.

3. What is the difference between a co-borrower and a co-applicant?
Co-applicant is an individual who is applying for a loan along with the primary applicant. On the other hand, a co-borrower is a person who is borrowing with the primary borrower. In both scenarios, a co-applicant and co-borrower need to provide all the necessary documentation.

4. Can a Personal Loan be in joint names?
Yes, a Personal Loan can be in joint names, mainly referred to as a joint loan. Both individuals need to fulfil the minimum eligibility criteria for a loan.


We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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