When it comes to being a co-applicant, your spouse or parents, are usually the ones. And any financial institution won’t allow just about anyone to become a co-borrower especially when it comes to a personal loan. However, it is imperative to find out if your prospective lender has any such provision.
So, it is important to understand that when you add a co-applicant in your loan application, the joint income is taken into consideration by the lender. Therefore, if you are a primary applicant and have a chance of losing out due to your income that’s when the co-applicant’s income comes in to fill the void.
Essential things to enhance your loan eligibility:
A co-applicant with a good income can certainly boost your personal loan eligibility, but there are various essential things you need to look at. So, it is important to understand that the income, as well as the credit score of the co-applicant, is taken into consideration by the lender because it can certainly give your eligibility the much-needed boost.
Hence, it’s essential for you to find out if your co-applicant has a good credit score or not.
Also, when applied jointly, the responsibility of paying the EMIs rests on both of you. In case your co-borrower fails to pay his/her part of the EMI, you must be ready to shoulder your co-applicants share of the EMI. A default in such a situation will affect both your scores.
Related Post - Benefits of adding your spouse as a co-owner when buying a home
Adding a co-borrower – a prudent way to enhance loan eligibility
Adding a co-applicant definitely enhances your personal loan eligibility. Moreover, when you add a co-applicant with a large income, it makes your eligibility for a bigger loan amount with a competitive interest rate.
As a co-applicant, your eligibility with his/her credit score and income, the success rate of approval is higher. Moreover, the loan is approved as quickly as possible.
You also usually get tax benefits from the home loan. But the co-applicant is entitled to receive any tax benefits only if she/he is a co-owner of the property.
Therefore it's suggested that you give careful thought as a co-applicant or before you decide to become one in home loan.
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