Looking for an affordable home goes hand-in-hand with seeking an equally affordable home loan. However, existing financial obligations or your current income may lower your eligibility for a high loan amount. Similarly, suppose your credit score is low or you are first-time borrower with no prior credit history, you may need additional backing to avail of a high-value home loan at a competitive interest rate.
You can opt for a joint home loan in such a situation, where a trusted individual with a good credit score acts as your guarantor (or co-signer) or a co-borrower. However, to understand whether you need a co-borrower or a co-signer for your home loan, you should be able to understand the difference between the two in detail. You can then avail of a Joint Home Loan from Bajaj Finserv to finance the purchase of your home conveniently. Not only will you benefit from a low rate of interest, but you can also enjoy a long tenor and value-added features such as assistance with property search and purchase.
Here is a look at how a co-signer is different from a co-applicant
When applying for a joint home loan with a co-borrower, it is important to note that both applicants share the responsibility of repayment equally. However, if you have a guarantor for your home loan, the obligation of repayment falls on the guarantor only if you, the borrower, cannot repay the home loan for any given reason.
Ownership of property
When you apply for a home loan with a co-borrower, typically, both you and the co-borrower share the ownership of the property. However, if you have a co-signer, the co-signer may not be interested in ownership, and his responsibilities would be limited to the terms of the home loan.
Additional Read: Remove co-applicants name from your home loan
Evaluation of eligibility by lender
In case you choose a co-borrower, the lender will thoroughly analyse both you and your co-borrower’s financial history to ensure that both of you are eligible for the home loan. However, when you have a guarantor, the primary responsibility of repayment of the loan still rests with you. Therefore, the guarantor’s role is limited to stepping in only if you cannot repay the loan. So, when you apply for a loan with a guarantor or co-signer, the lender is less likely to use the same parameters to evaluate your co-signer’s eligibility. In this case, the guarantor’s credit score is more important.
To decide whether you should select a co-applicant or co-signer for your home loan, consider the following factors:
- Evaluate your home loan repayment ability
- Check whether you want to share property ownership
- Make a decision based on your credit score and financial history
These are some ways in which a co-signer and co-borrower differ. Once you select the option that is best for you, proceed with choosing an appropriate home loan. Use a home loan eligibility calculator to see whether you qualify for a home loan with a lender of your choice. Then, use a home loan EMI calculator to calculate your potential EMIs.
Bajaj Finserv brings you pre-approved offers for personal loans, home loans, business loans, and a host of other financial products. Not only does this simplify the process of availing of financing, but it also helps you save on time. All you have to do is share a few basic details and check out your pre-approved offer.
Additional Read: How does having a co-applicant for your home loan help?
Need instant financing? Do it with Bajaj Finserv.
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