Every person hopes for an easy lifestyle and wants to give the best of everything to their family members. However, if the needs aren’t met with the current financial situation, taking a personal loan and gradually repaying it off seems like a viable option to cover specific financial expenses.
These days it is very easy to apply for and get a personal loan since giving collateral against the loan is unnecessary. Minimal documentation, like basic personal details and income proof, is enough to get a loan sanctioned.
Sometimes a loan may get rejected if one cannot fulfil the eligibility criteria. This may happen because of a low credit score or when the monthly income barely covers the EMI arising from the loan. Loan rejection, typically, also happens when the loan amount is high. The best option in such a scenario would be to apply for a joint personal loan, where the primary borrower and a co-applicant share the repayment burden.
Who is a co-applicant?
A co-applicant is a person with whom one jointly applies for a loan. This person shares the loan repayment responsibility with the primary borrower. Such loans are also called joint loans. While applying for a joint personal loan, the credit score, the income of the co-applicant, and the joint personal loan eligibility of both applicants are factored in. In the case of a personal loan, the spouse, parents, or siblings can be the co-applicants.
Joint personal loan eligibility
- Applicants must be Indian citizens working in a public or private limited company or an MNC.
- The age of the applicants should be between 21 and 60 years.
- Applicants should have a credit score of more than 750.
- Applicants should be graduates with a minimum of 1 year of work experience.
- Should have a minimum income of Rs. 25,000.
Joint loan application process
Borrowers can easily apply for joint personal loans online by following a simple process. Both applicants must fill out the joint loan application form with their respective details.
Both the applicants need to submit a few documents, including:
- Aadhaar cards
- PAN cards
- Salary slip or income proof of last three months
- Bank statements for the last six months
After submitting these documents, the lender will verify them and check both applicants’ credit scores. After verification, the loan gets approved, and the amount is credited in the borrower’s bank account.
Some things to consider while applying for a personal loan with a co-applicant
- The co-applicant’s credit score can increase or decrease the primary lender’s credit score; this is an important factor to consider for joint personal loan eligibility.
- Additional documents will be required as both applicants need to submit their respective documents. Getting all the documents ready can be time-consuming. The process may get delayed since both applicants’ joint loan applications must be verified.
- The co-applicant has to share the burden of loan repayment. If, by chance, the co-applicant defaults, it will affect the primary applicant’s credit score. In some cases, co-applicants might not be willing to share the burden of repaying the loan. In such a case, the entire loan amount is given to the primary loan borrower, who will repay the entire amount. This will increase the EMI since the repayment will not be shared.
- Not all banks/financial institutions offer joint personal loans. However, it may be considered if the applicant’s relationship with the bank is good.
Joint personal loan eligibility calculator
The most important thing to know when applying for a joint personal loan is the EMI (Equated Monthly Instalment) amount. This is the amount the borrower will be paying every month. A personal loan EMI calculator can help calculate this amount. The joint personal loan eligibility calculator also calculates the total interest payable and the total amount payable if the joint personal loan is availed.
How is a joint personal loan EMI calculated?
It is calculated using the below formula –
[P x R x (1+R) ^N] / [(1+R) ^N-1]
Here, P stands for the principal or loan amount. It is the total loan amount that has been availed.
R is the rate of interest. It is the rate at which interest will be charged on the principal amount and is calculated in percentage.
N is the tenure or the number of years for which the loan is availed. It represents the amount of time the borrower will need to repay the loan amount along with interest.
The joint personal loan can also be pre-closed. Some additional pre-closure charges might apply. While taking a joint personal loan, one must remember not to default on repayment to maintain a good credit score.
The chances of getting a loan approved are higher with joint personal loans. Also, the loan repayment burden is shared with the co-applicant. Tata Capital provides several options to get personal loans that suit the needs of the applicants, who can easily apply for joint personal loans online. Use the Tata Capital joint personal loan eligibility calculator to assess the EMI and plan your finances accordingly.