A home loan is a lengthy financial commitment that involves choosing and applying for an affordable sanction and repaying the loan through your chosen tenor. However, to improve affordability, you can borrow your home loan along with a co-applicant. A joint home loan allows you to share the responsibility and obligation of a home loan with a relative, family, friend, or even your business partner. A co-applicant is a co-borrower who, just like you, is responsible for repaying the loan. Remember, your co-applicant is also the co-owner of the home, and his or her name needs to be mentioned on the property documents as well.
Here’s how a co-applicant can help you with your home loan.
1. Shares the home loan obligation with you:
Since a home loan usually involves a large amount of money, your debt obligation can be quite high. However, in case of a joint home loan, you get to share this obligation with a co-applicant, who is equally responsible to repay the loan.
2. Increases your chances of approval on a nominal interest rate
A poor credit score can lead to your loan application being rejected or result in you receiving a higher rate of interest than the norm. However, if your co-applicant has a good credit score, your home loan application has higher chances of being approved, and this can also help you get the lowest home loan interest rate. This makes your loan much more affordable and easy to repay.
3. Boosts your credit score with their own credit standing
Once you and your co-applicant borrow the loan and succeed in repaying it in a timely manner, both your and their credit score is boosted. This way, you can avail credit when you need it to meet urgent experiences or to fulfill your personal and professional goals in the future.
4. Adds more affordability and helps you get a higher amount sanction
Since both you and your co-applicant pay EMIs in a joint home loan, the debt burden is divided, thus reducing your monthly payments. This makes your loan much more affordable. Using the same logic, the lender may also sanction a more substantial home loan amount to you, so you can purchase the home that you want without any compromise.
Now that you know how a co-applicant can benefit you, have a look at the actual responsibilities and the role of a co-applicant.
- The co-applicant has the equal responsibility to repay the loan just as you do
- The co-applicant is responsible for the loan in case of any catastrophe happening to you
- The co-applicant enjoys the same tax benefits on the loan as you do
- If you default on your EMIs your co-applicant’s credit score falls and vice versa
Usually, lenders allow the following to apply as co-applicants:
- Your husband or wife
- Your sibling
- Your son or daughter
- Your parent
You can easily apply for a Joint Home Loan from Bajaj Finserv and gain from the benefits listed above.
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