PERSONAL LOAN AND A CO-APPLICANT
A personal loan is an unsecured loan which means that the bank or the money lender does not have any security or collateral of the borrower. Therefore, a money lender or a bank needs some satisfaction that the borrower will be able to repay the loan. Because of this, an eligibility criteria was made which includes a good credit score, a good credit history, a good repayment capacity and everything. Not only this but also the successful verification of the documents is required in order to avail a personal loan. Your identity proof, income proof, address proof, everything will be checked and verified by the money lender. After the successful verification, a personal loan is finally sanctioned to the borrower. Qualifying for a personal loan depends on a lot of factors such as a person's income, his current liabilities among others and his credit score. A person may also fail to meet the eligibility criteria of a personal loan as a primary borrower either due to his inadequate income or his low credit score. The amount of EMIs can be calculated with the help of a personal loan calculator SBI. In such situations, a person can apply for a joint loan with a co-borrower or a co-applicant. It will enhance the overall eligibility too.
WHO CAN BE A CO-APPLICANT IN A PERSONAL LOAN?
The banks or the money lenders or any other financial institutions do not allow anyone to become a co-applicant in case of a personal loan. This is because most personal loans are higher. A co-borrower or a co-applicant can be one of your parents or can also be your spouse. Also, you need to find out if a money lender or bank has any such provision or not. When a person adds a co-applicant or a co-borrower in the application of a loan, their joint income is also taken into consideration by the money lender. Therefore, if a person is not able to stand up to the eligibility criteria of a personal loan as a primary borrower either due to his income or any other reason, he can apply for a personal loan with a co-applicant. Also, if he will add a co-borrower which has a good credit score and a large income, then there are chances that the person can get a personal loan of even a bigger amount and that too at a competitive rate of interest.
IMPORTANT THINGS TO TAKE INTO CONSIDERATION
As mentioned above, a co-borrower or a co-applicant with a good income and a good credit score can certainly improve the eligibility of a personal loan, there are some important things that you need to watch out for.
1. The income of the co-applicant is not the only thing that is taken into consideration but his credit score too.
2. A good credit score can, no doubt, boost your personal loan eligibility but at the same time, a poor credit score can dent your own chances of procuring the personal loan.
3. Therefore, it is really important to find out if the co-applicant has a good credit score or not.
4. Also, when you will apply jointly for a personal loan, the onus of paying the equated monthly installments rests on both the borrowers.
5. In case your co-applicant fails to pay his/her part of the monthly installment, then, you must get yourself ready to repay the co-applicant's share of the monthly installments.
6. A default on the part of any of the borrowers will affect both of the credit scores of the borrowers.
CONCLUSION: A co-applicant or a co-borrower can be of great help in getting a personal loan. A personal loan can be availed easily with a co-applicant. The amount of the EMIs can be calculated with the help of an EMI calculator personal loan. The borrower has to repay the personal loan to the bank or to the money lender in the form of monthly installments.
Must Read:- Personal Loan Insurance