Here’s How You Can Get A Personal Loan With A Co-applicant
Personal Loans are in high demand nowadays because of their easy availability and hassle-free application procedure. Such loans have become a favourite amongst borrowers who need immediate credit as they do not need any collateral.
However, the question most borrowers with low loan viability often ask is, “How much loan can I get?” Fret not! You can use the co-application option for getting Personal Loans with NBFCS like Poonawalla Fincorp.
Personal Loans are unsecured loans, and the approval of the loan application mainly depends on the borrower’s credit score and income status.
Since life is unpredictable, the need for credit can turn up without prior notice. If you do not have much saved for the future and have a low CIBIL score, you will need a co-applicant to be eligible for a Personal Loan. A co-applicant can save you from a low-income situation and help you get a Personal Loan.
What is the Definition of a Co-applicant?
A co-applicant is the person who shall bear the responsibility of a Personal Loan amount along with you. Co-application is a very familiar attribute of Personal Loans, and in most cases, the spouse is the most preferred choice for a co-applicant.
When applying for a loan with a co-applicant, the lender will screen both applicants’ incomes and the CIBIL score. Therefore, the applicant and the co-applicant are equally accountable when paying back the borrowed amount. In case of failure of repayment of the loan or skipping EMIs, the required measure taken by the lending institution will be the same for both.
Eligible Candidates to be Co-applicants
Parents, siblings, and spouses are eligible to be co-applicants. In the case of Home Loans, a suitable combination of the applicant and the co-applicant is like maiden daughter-mother/father, parent-son, brothers, and so on.
Since a Personal Loan does not require any pledge entities (Gold, Vehicle, House, etc.) or collateral, various other combinations can also be considered depending on the lender’s rules and regulations.
What are the Benefits of Having a Co-applicant?
In cases of low income or low credit score, co-application is the best option because both applicants’ incomes shall be considered to meet the personal loan eligibility criteria for higher loans. When a single income cannot meet the required criteria, the assembled income of both applicants can serve the purpose.
If you have a low CIBIL score, a co-applicant with a high credit score can help you to get the loan application approved. The repayment of the principal amount, along with interest, is difficult. A co-applicant will share the responsibility of repayment with you and take half of the pressure off your shoulder.
Challenges of Getting a Co-applicant for Your Loan
A co-applicant will share your burden and help you get your loan application approved. But first, let us look at the disadvantages of having a co-applicant.
- You need to submit the same set of documents required along with a loan application for the co-applicant too. Sometimes, it’s extra pressure to arrange all the documents for both parties.
- Getting a co-applicant with a high income and good credit score is not always easy. If your parents are retired or don’t have good CIBIL scores, you cannot have them as co-applicants.
- The idea of having a co-applicant is to share the responsibilities of repayment of the loan. Suppose your co-applicant does not want to bear the obligation; in that case, you must carry all the burden yourself, which can be very difficult.
- Getting a co-applicant can delay the loan approval process as there will be an extra set of papers to scrutinize.
- Not all financial institutions provide the facility of co-application for a Personal Loan amount.
The Process of Application for a Personal Loan with a Co-applicant involves:
- First, know your lender and learn about the eligibility criteria.
- After your lender agrees to a joint application, list the documents required and collect them as soon as possible. The necessary documents are mostly Identity Proof, Proof of Address, PAN card, Income proof, and photographs.
- Apply, and before that, enquire about the submission procedure from your lender.
- It takes 7-10 days to get the application approved.
When applying with a co-applicant arise in your mind, read this article, and get further clarity with a creditor of your choosing.
