The fact of whether you are having a poor credit score or you have a healthy credit score matters to the company that is lending money. As the company owning a fund, they need to confirm with the current living conditions, whether you have a poor living status, whether you are having a backlog in financial status, whether there are outstanding payments and dues to see whether the individual is fit to pay the money on repayment policies.
A personal loan is given to an individual without keeping collateral at the front desk, so to limit the risk of the company not getting back the money they have to lend o the company, the company conducts a test known as CIBIL, and this CIBIL score is taken into consideration to decide the perfect applicant if the score is less then the company doesn’t approve the loan application.
The main difference between a co-applicant and a guarantor is that a co-signer is part of the property that is owned regardless if they stay at that place or not. A guarantor is a person who is responsible for the repayment if the applicant or the borrower is unable to pay the money that was taken but doesn’t have any benefits of owning the property.
The benefits of having a co-applicant are
The Personal Loan Interest Rates can vary according to the credit score. If the credit score of the co-applicant is good then the process of accepting the loan is higher in chance. The better the credit score that person can take a loan with a lower interest rate.
A company only gives a personal loan if the individual has a good credit score, but if you don’t have a good credit score then the defaulted applicant can choose to apply using a few different methods. Withdrawing provident fund, taking salary advance, peer to peer borrowing, Consolidating the debt, raise of income, backup by a guarantor, if these factors are followed then the loan will be approved. When the co-applicant has a good credit score then the chance of getting a loan is high.
As soon as the application is sent to the lender, the approval happens fast. The money is then instantly disbursed to the borrower within a few hours. TATA Capital Personal Loan is among the top in the market.
Who can be co-applicant
All banks consider a spouse as the best co-applicant for applying for personal loans. Both wife and husband can have a joint account as their incomes are taken into consideration. The tenure of the loan is decided according to the age of the older person, and both can enjoy the benefits.
A family can include a mother /father/sister/brother. Banks will only consider blood relations regardless of them being sister or brother.
Need for co-applicant
A co-applicant is a person with whom you can apply for a loan, regardless of whether they are your spouse, family member etc. Being eligible for a loan is a very important factor to be concerned about if you are not eligible for the loan then, you can apply for the loan with a co-applicant. Banks not only consider your income but also take note of your credit history, credit score etc.
Conclusion:
Personal loans have made their impact on the market due to their usage and hassle-free application. If the individual is not having a good score then they can apply with the co-applicant. Choosing a co-applicant is as important as choosing the right loan, it is not good to bring a co-applicant if the ratio of debt to income is the same or lower than the applicant.