When is a co-applicant required for a Personal Loan?
Who can be the ideal co-signer when you apply ?
Ideally, when you apply for a Personal Loan or any other type of loan for that matter you will need to be eligible for availing the loan. Your income, and the company you work for determine to a rough extent the amount that is borrowable by you. However, if individually you aren’t eligible for the loan amount you desire, be it in terms of income or stability you can easily overcome this by including a co-applicant to your application.
A co-applicant / co-signer is generally roped in when the primary applicant:
- is unmarried and is staying in a rented house / Bachelor’s accommodation
- is not eligible for maximum loan amount when individual profile is considered
- has low stability (such as company or residence stability)
- has 0 or -1 cibil score
Once the co-signer or co-applicant is added to the application, he or she is equally responsible for the loan as the primary applicant. In the situations mentioned above, the co-applicant is equally responsible towards repaying the loan as the primary borrower. Especially when the primary borrower has a 0 or -1 cibil score or a low stability (this can mean no. of years of work experience or the no. of years in the current city).
Now, on to the next question, who can be a co-applicant? When it comes to applying for a maximum loan amount, your spouse is the best choice. Whereas, if you want to increase your chances of approval to show your stability, your parent will be the ideal choice. Overall, the process is quite the same, however the advantage is added on. So, be sure to explore your options when you choose a suitable offer.
