Home Loan Co-Applicant

It is reportedly more beneficial to apply for a Home Loan with a co-applicant in your loan application, but who is eligible to become your co-applicant, and how does their involvement help enhance your Home Loan application quality?

Your Home Loan co-applicant can be anyone who volunteers to borrow the Home Loan amount with you, supplementing your Home Loan eligibility with an increased repayment capacity. Applying with a co-applicant is especially beneficial in the following circumstances:

• If you are a senior borrower who may not be eligible for competitive lending terms
• If your repayment capacity isn’t high enough to accommodate a Home Loan
• If your Home Loan amount is higher than what your eligibility allows
• If your CIBIL score is under the ideal score of 725

Before you make your Home Loan application, you must also be very clear about the kind of assistance you require. Here are the different roles individuals can play in enhancing your Home Loan application:

• Co-Applicants: A co-applicant of a Home Loan jointly shares the responsibility of making the timely Home Loan EMI payments alongside the primary borrower.
• Co-Borrower: A co-borrower is just as important as the primary borrower, and is liable to face legal action, if they are unable to repay the loan on time, in case the primary borrower defaults.
• Co-Signer: A co-signer’s role is more honorary than executive; they help vouch for the primary borrower’s eligibility, and don’t necessarily have to repay the loan amount, should the primary borrower fail.

Certain rules dictate who can be a co-applicant on a borrower’s Home Loan application. Most lenders prefer that family members or blood relatives apply together as primary borrower and co-applicant on a Home Loan application, especially as both income sources are considered at the time of Home Loan sanction.

Also note that under no circumstances can the Home Loan co-applicant be a minor. Here are some combinations that may ensure easier housing loan approval for you:

• Spouses Father and Son
• Unmarried Daughter and either Parent
• Brother and Sister

However, do understand that every combination will have a set of eligibility parameters to meet before they are approved for a Home Loan.

Also Read: Process to Change Co-applicants in a Home Loan

Note: This page is for the purpose of generic information. Whether a guarantor is requested in your case will depend on your profile and the lender.

*Terms and conditions apply