How to Get a Personal Loan with a Co-Borrower

Due to their widespread availability, personal loans have recently grown to be fairly popular. Additionally, they do not even require collateral, making them the borrowers’ preferred choice when seeking urgent loans. A personal loan only requires the bare minimum of paperwork, which includes basic identification and income verification documents with photos.

The acceptance or denial of your personal loan will depend on your credit score and income, both of which are given equal weight by the lender because personal loans are unsecured, or not secured by collateral.

You are aware of the possibility that you might require credit at any time, depriving you of the opportunity to save or make plans. How well are you able to handle circumstances where you require a personal loan but have poor credit or a low income?

A personal loan with a co-applicant would be the solution to this problem.

Who is a co-applicant?

Someone who shares your responsibility for a personal loan is a co-applicant. Co-application is a common practice when it comes to home loans, with couples being the most common co-application combination. Personal loans are currently being added to the list of goods that can make use of this feature by some banks and financial institutions.

The obligation to repay the loan falls equally on the original applicant and any co-applicants. Both applicants’ credit histories and incomes are taken into consideration while making the decision. In the event of a default, both applicants’ credit ratings are impacted, and the lender is entirely within its rights to file a lawsuit against both of them.

Who can be a co-applicant?

You can add a co-applicant to your personal loan, such as your spouse, parents, or siblings. Only specific pairings, such as parent-son, brother, and unmarried daughter-father/mother, are permitted when applying for a home loan, in contrast to the usual loan application from a spouse.

However, other combinations may also be permitted for co-application because a personal loan does not require collateral or pledged assets (such as a house, gold, vehicle, etc.). Once more, this would depend on the guidelines, standards, and practices of your bank or financial institution.

Benefits of including a co-applicant for a personal loan

Since the application will be evaluated jointly, adding a co-applicant can help you raise your income and improve your credit score. Due to this, you can be qualified for a larger personal loan to meet your needs. Additionally, it can make you qualified for a loan where a personal application would not be. This could be brought on by a lack of money or a low credit score.

Having a co-applicant enables you to divide the cost of the EMI between two persons, thereby reducing the burden on just one person.

Challenges in making a co-application for a personal loan

A co-applicant boosts your likelihood of getting a loan and lessens your responsibility for loan repayment. Nevertheless, finding a co-applicant for your personal loan in India comes with some difficulties.

Getting a co-applicant

Your parents, spouse, siblings, and kids are all eligible to apply as co-applicants with the lender. However, it is pointless to list your parents as co-applicants if they are retired or have poor credit.

Additional documentation

More candidates will inevitably result in twice as much labor. Both candidates’ information needs to be filled out, which will take additional time and effort.

Agreement regarding repayment of the loan

It’s nice to have a co-applicant, but submitting a joint application entails sharing responsibility. Your loan can be approved with a co-applicant, but what happens if you can’t convince them to accept joint responsibility for the EMIs or in the event of default? The loan will thereafter be entirely your responsibility to repay. Given that his risk increases and the interest is not completely safeguarded, the lender might not consent to such a plan.

More time for approval

A co-application loan could take longer to approve and disburse than a typical personal loan, which typically takes 24-36 hours. As there will be two sets of paperwork to review, the lender may need to take additional time processing the application. The disbursal process will inevitably be delayed by this.

The feature is lender specific

This co-application service for personal loans is not available from all lenders. If you and your lender get along well, you might be able to ask for the same. Many of the online fintech lenders do not include a co-applicant clause in their applications. If you are considering submitting a co-application, you should confirm that the lender is willing to accept it.


In order to maintain a solid credit score for all future credit needs, regardless of the sort of loan you apply for, whether as an individual or jointly, make sure you pay your payments on time.

Leave a Reply

Your email address will not be published. Required fields are marked *

WC Captcha 7 + one =