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How a co-borrower can increase the chance of getting your personal loan approved

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How a co-borrower can increase the chance of getting your personal loan approved

  • Highlights

  • Apply with a co-borrower to get a better deal on your loan

  • A co-borrower with a good income and credit score boost your eligibility

  • Only your spouse or parents can be co-borrowers

  • Some lenders may also allow siblings as co-applicants

Qualifying for a personal loan depends on several factors including your income, credit score and current liabilities among others. In some cases, you as a primary borrower may fail to meet the eligibility criteria for availing a personal loan because of a poor credit score or inadequate income.

In such a scenario, roping in a co-borrower (co-applicant) and making a joint application can enhance the overalleligibility. Read on to know how a co-borrower can boost your personal loan eligibility.

Who can be a co-borrower in personal loan?

Financial institutions don’t allow just about anyone to become a co-borrower in case of a personal loan. A co-borrower can be your spouseor parents. Some institutions may allow siblings to be co-borrowers. However, you need to find out if your prospective lender has any such provision.

When you add a co-borrower in your loan application, the joint income is taken into consideration by the lender.

Thus, if you as a primary borrower may lose out due to your income, your co-borrower’s income fills the void.

Also, adding a co-borrower with a large income might make you eligible for a bigger loan amount at a competitive interest rate.

Essential things to watch out for

While a co-borrower with a good income can certainly boost your personal loan eligibility, there are certain essential things you need to watch out for. Note that it’s not only the income of the co-borrowerthat’s taken into account by the lender, but also the credit score.

While a good score of the co-applicant can certainly give your eligibility the much-needed boost, a poor score can dent your chances of procuring the loan. Hence, it’s important for you to find out if your co-borrower has a good credit score or not.

Also, when applied jointly, the onus 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-applicant’s share of the EMI. A default will affect both your scores.

Adding a co-borrower – a prudent way to enhance loan eligibility

Since co-borrower for a personal loan includes your family member(s), it’s a prudent way to boost loan eligibility. It reduces chances of a conflict to a great extent in case your co-borrower fails to shoulder his/her part of the EMIs to be paid. Not only does a co-borrower enhances your personal loan eligibility, but it also gives you an opportunity to avail a larger amount at better rates.

With pre-approved offers from Bajaj Finserv on a gamut of loans including home loan, business loan and personal loan, availing finance is an easy and hassle-free affair. Know your pre-approved offer by sharing a few basic details.

DISCLAIMER: The personal loan features mentioned in this article are subject to change, based on policy revisions. For the updated product details, please visit the Bajaj Finserv Personal Loan page here.

 

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