Role of a Co-Applicant in Home Loan



These three are the common finance terms which are frequently used, when you are researching about home loans. However, many of the us don’t know the exact meaning & implications of these terms and gets confused.

Co-owner (or partner) – an individual or a group that has a legal share in the property.

Co-applicant (or co-borrower) – a person who applies for a loan along with primary borrower and who is equally liable to repay the loan, when the primary applicant defaults/dies. A co-applicant may or may have not legal rights on the property.

A general rule is that while applying for a home loan, all co-owners of a property has to be co-applicants whereas the reverse cannot always be true, i.e. all the co-applicants may not be the co-owners of the property. E.g. even though wife is the sole owner of the property, loan can be taken by husband and wife as co-applicants.

Moreover, in cases where the asset is mortgaged for availing loans, the lender will insist on taking all the co-owners as co-applicant(s).

Who can be a co-applicant?

As per most Banks and Finance Companies, an immediate family member can be a co-applicant. He / She can be salaried or a self employed person. A Non-Resident Indian is also eligible to be a co-applicant.

Most common relationships that can be co-applicant includes:

  1. 1. Spouse
  2. 2. Brother and Brother
  3. 3. Father / Mother and Son
  4. 4. Father / Mother and Unmarried Daughter

Some relations are generally not eligible to be co-applicants and includes:

  1. 1. Brother and Sister
  2. 2. Sister and Sister
  3. 3. Father / Mother and Married Daughter

(Note: Whether to accept or reject the person as a co-applicant is sole discretionary right of a lender)

Key Advantages of Having a Co-Applicant

  1. 1. Higher loan amount eligibility. (Calculate your home loan amount eligibility with Online Loan Calculator)
  2. 2. Higher chances of approval of a loan due to reduced risk for lender(s).
  3. 3. Tax deductions for co-applicants under Section 80C and & Section 24 of the Income Tax Act, given they are also co-owners of the property.
  4. 4. Strong credit history of co-applicant(s) benefits in favourable credit terms.
  5. 5. In case of death of one of the applicant, the survivor automatically becomes the owner if he/she is already co-owner of the property. No need to file any legal suit for a succession of property.

Key Disadvantages of Having a Co-Applicant

  1. 1. There can be delay at the document collection stage.
  2. 2. Dispute may arise in case of a fight between co-applicants.
  3. 3. In case of default, the co-applicant has to repay the remaining dues.
  4. 4. The low credit score of co-applicant will have a negative impact on main applicant’s home loan application.
  5. 5. The signatures of all the co-applicants are required on each paper from beginning to closure. In absence of the co-applicant, the given request cannot be processed.


To have a co-applicant in a home loan is not a legal requirement. Factors such as continuously increasing housing rates, low income / eligibility and/or low credit score are making it difficult for individuals to avail loan single-handedly. Though, a person must carefully read & understand the rules & laws before becoming a co-applicant in a home loan.

Hope this article has resolved most of your queries about co-applicant. If you still have any questions about co-applicant or home loan, then you can get free consultation here.

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