Does Your Co-Applicant Affect Your Personal Loan Eligibility

From planning your dream vacation, wedding celebration, and medical emergencies, personal loans are one of the most versatile and flexible financing solutions in modern day. However, if you’re someone who has a low credit score and is failing to meet the eligibility requirement for the loan, we have just the answer for you. Welcome the concept of a co-applicant into your life and financial planning.

Co applicants are people who can share the financial burden while helping to amp up your creditworthiness for better loan opportunities. In this guide, we’ll discuss the crucial impact a co-applicant can have on your personal loan eligibility.

Positive Impact of Co-Applicants on Personal Loan Eligibility

Opting for a co-applicant can have multi-fold impacts on your personal loan eligibility. Let’s discuss what those impacts are:

1. Boost Your Credit Score

Joining hands with a partner who has a high credit score, such as 750, will help boost your credit score and allow for easy loan approval. It can also bring better loan options, lower interest rates, and flexibility in tenure.

2. Improved Total Income

With two sources of income, the total income is twofold, which improves your debt-to-income ratio. It helps to build trust among lenders and improve your repayment capability. For instance, if your salary is falling short of the minimum income requirement, a co-applicant can help clear it with ease.

3. Larger Loan Amount

If you want a larger loan amount for foreign travel or medical emergencies, a co-applicant can help improve the maximum loan amount applicable.

4. Lack of Credit History

If this is your first time opting for a loan, the lack of financial history can hamper your eligibility. Opting for a co-applicant will ensure a reliable date and background to improve your credibility and reliability.

Some Drawbacks of Opting For a Co-Applicant For a Personal Loan Eligibility

While there are some great advantages of applying with a co-applicant, it can come with some inconveniences that can hurt your personal loan eligibility:

1. Applying For Smaller Amounts

If you are applying for a small loan, opting for a co-applicant isn’t the right choice. You can apply for a loan alone and reap all the credit benefits with ease.

2. Poor Credit

If your partner is someone with poor credit, it can reduce the overall creditworthiness of your application. Along with this, if they have past debt, your debt-to-ratio will also increase, hampering your application chances.

3. Shared Financial Burden

Now that the responsibility of EMI payments is on both of you, if the co-applicant fails to pay their share, the burden will fall on your shoulders. Late payments can result in penalties and affect your credit history, too.

Step-by-Step Guide For Applying For a Personal Loan With Co-Applicants

With digital servers and minimal documentation, applying for loans has been easier. At My Mudra, you can apply for a personal loan with a co-applicant in just a few steps:

1. Research and Compare

Check for factors such as lower interest rates, flexible tenures and better customer service to ensure that your loan application goes smoothly. Make sure to do a personal loan eligibility check for co applicants before applying for the loan.

2. Gather All the Necessary Documents

Every bank and NBFC requires specific documents to verify your credit history and personal information. Here are some key documents you must keep ready before the application:

• Address Proof: Aadhaar Card/ Passport

• ID Proof: Driving License/ Voter ID

• Income Proof: Salary Statements (For the last 6 months) and Income Tax Returns (last 2-3 years)

• Photographs

3. Apply Online

With reputable brands like My Mudra, you can access many loan options in just a few clicks. Submit all the necessary documents, fill in the details, and apply for a personal loan with a simple click.

4. Wait For the Approval

You can get instant approval for your loan. Make sure to take a copy of the application slip for future reference.

Explore Personal Loan Eligibility For Co-Applicants for Different Banks

Each bank has its own eligibility requirements when applying with a co-applicant. Factors such as total income, credit score, and stable income are taken into consideration:

Conclusion

Having a co-applicant for your personal loan can completely change your financing solutions. It brings new avenues, better loan options, smoother repayment, and reduced interest rates. However, it is key to find a reliable applicant who has a good credit history to avoid any overburden on your shoulders. You can always opt for My Mudra to enjoy minimal documentation, the lowest interest rates, and an all-online application process for fast approvals. Get your co-applicant and apply for a personal loan with My Mudra, a top fintech company in just a few clicks and get a fast disbursal in no time.

Also read: 5 Factors That Affect Your Personal Loan Eligibility