Individuals who fail to meet the eligibility requirements for an unsecured personal loan may opt to apply with a co-signer or co-borrower. This helps the application get processed more easily.
Nonetheless, there is a difference between the terms - ‘co-borrower’ or ‘co-signer.’
A co-signer is an individual who signs a personal loan application and agrees to take on the repayment liability if the borrower fails to settle the debt on his/her own.
Availing a personal loan becomes much easier with a co-signer because the person acts as a security to the lender and mitigates the risk of defaulting. Furthermore, with an eligible loan co-signer in place, an applicant with low credit score also stands the chance to avail of a higher loan amount and optimise the entire borrowing experience.
Nonetheless, the role of co-signers must not be confused with co-borrowers.
A co-borrower is a person who shoulders equal responsibility in repaying the personal loan amount availed. They are co-owners of the credits availed and share EMI payments, loan proceeds and enjoy tax benefits, if any.
Conversely, in the case of a personal loan with a co-signer, the concerned individual has to repay the loan amount only during defaults. Thus, he/she takes up the responsibility of loan repayment without any right to the asset or benefits of ownership.
The role of co-signers is similar to that of guarantors, aiding applicants increase their chances of availing unsecured credits. Like a guarantor, the co-signer also ensures repayment of the availed loan, in case the primary applicant defaults.
If an applicant is deemed a risky borrower, he/she can apply for a personal loan with a co-signer to increase creditworthiness.
However, consider these few factors in relation to having a co-signer before proceeding –
Proceed to apply for the Bajaj Finserv Personal Loan with co-signers only after considering these above few factors. Subsequently, check the eligibility parameters laid down for a co-signer and apply with one who fulfils them in order to avoid rejection of your application.
Did you know, a good CIBIL score can help you get a better deal on loans and credit cards?