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.

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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 enhance 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 content of this document is meant merely for information purposes. The personal loan features mentioned in this article are subject to updation, completion, revision, verification and the same may change materially based on policy revisions. For more details, please visit our Personal Loan terms and conditions page here.
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