To qualify for a personal loan, a borrower had to pass several criteria including your income, credit score, and current liabilities. There can be a case where you as a primary borrower is not capable of fulfilling the eligibility criteria, it can be a poor credit score or inadequate income. In such a situation, having a co-borrower(guarantor) can enhance your eligibility criteria. A co-borrowers name can be easily seen on the loan documents and on the property’s title. This can happen only when you make a joint application with your co-borrower. You can apply for an auto loan, personal loan, and even a credit card with the help of a guarantor.
Who can be a co-borrower in a personal loan?
The financial sector does not allow anyone to be your co-borrower and guarantees a personal loan for you. A co-borrower can be your spouse, parents, or in some banking sector siblings can also be considered as co-borrower. When a co-borrower is added to your loan application, the lender starts considering the joint income. Thus if you’re lacking in filling the void of income then, you can fill it with your guarantor’s income. You can also have a co-borrower to achieve some bigger loan amount at a competitive interest rate.
Syndicate bank personal loan comes with added benefits.
Benefits of co-borrower
Some of the benefits of having a co-borrower are:
Lower interest rate:-
For an individual having a CIBIL score, sometimes it becomes difficult for them to get a loan sanctioned. So to avoid this problem, you can rope with a co-borrower having a decent CIBIL score. This will increase your chances of getting faster approval along with a lower personal loan interest rate.
Increased personal loan eligibility:-
Your eligibility for getting a personal loan sanctioned increases drastically with a co-borrower who has a decent CIBIL score.
Instantly loan disbursed:-
Your loan will be disbursed instantly, once it gets approved.
Is it necessary to have a co-borrower?
A guarantor is not a mandatory condition for getting a loan sanctioned. Sometimes you don’t meet up with the eligibility criteria for getting a loan, in this case, you can rope with a co-borrower to increase the chances of getting a loan approved. Always seek a co-borrower having a good CIBIL score as it can increase personal loan eligibility.
When not to use a co-applicant
The condition of the guarantor arises when a borrower is not capable of fulfilling the required eligibility criteria for getting a loan sanctioned. So if your co-borrower is having the same or lower debt ratio, then the guarantor is not a good option. This is because a loan is sanctioned based on the credit score, and a guarantor with a bad credit score can reduce your chances of getting a loan approved.
Conclusion- Sometimes adding a co-borrower is the only way to enhance your loan eligibility. Always seek a guarantor who is having a great CIBIL score.
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