What Is a Co-Application for a Loan – Who is a Co-Applicant?

  • Updated on: 29 Dec 2023
  • Published on: 23 May 2023
What Is a Co-Application for a Loan – Who is a Co-Applicant?

Knowing what a co-applicant means is essential before applying for a loan. Involving a co-applicant in your borrowing process can improve your loan approval chances and help you get affordable loan terms. 

Loans are an efficient way to secure funding without depleting your savings or liquidating your investments. However, if you’re finding it difficult to meet the eligibility criteria set by the lender, applying with a co-applicant can help. 

That said, you need to wait before you opt for a co-applicant. After all, you need to know how co-application impacts you and your finances. Here’s a brief overview of co-application, its benefits, drawbacks and more.

What is Co-application for a Loan?

A co-applicant borrows a loan jointly with you. Co-application is also known as a joint application. As the term rightly implies, you and the co-applicant are equally responsible for repaying the loan.

If you require ample funding but don’t meet the lender’s eligibility terms, this is the best option. As lenders assess the credit history of all applicants, you can easily get affordable loan offers.

Co-applicants need to meet the lender’s eligibility criteria. Remember, only your family members can be co-applicants, which include: parents, spouses and siblings. 

Benefits and Drawbacks of Applying with a Co-applicant

Now that you know what is a co-applicant on a loan, here are the advantages and drawbacks you must be aware of:


  • Increased chances of approval
  • Access to a higher loan amount at an affordable cost
  • Reduced repayment burden as all applicants shoulder responsibility 
  • Tax benefits for all applicants, depending on the type of loan


  • Impact on credit score and thereby on the creditworthiness of all applicants 
  • Added repayment stress if one borrower fails to repay
  • Affects the loan amount and ownership of assets (in some cases)

Co-applicant VS. Co-signer

Co-applicants and co-signers may sound similar, but they aren’t the same. A co-applicant shares the loan repayment responsibility and enjoys the same benefits and rights as the primary applicant.

On the other hand, a co-signer only helps the primary applicant get a better loan offer using their positive credit history. They do not share joint responsibilities for loan repayment and only step up when the primary applicant defaults. 

Thus, applying with a co-applicant can help manage your repayment better, but a co-signer only helps you improve your chances of approval if you have a low credit score.  

How to Decide if You Need a Co-applicant?

Involving a co-applicant is an important decision that can also impact your creditworthiness. Consider these points when applying with a co-applicant: 

  • If you are eligible for the loan amount and its repayment, avoid co-application
  • If the co-applicant’s credit history is not up to the mark, avoid co-applying
  • Ensure that your co-applicant is trustworthy and meets the lender’s requirements

Now that the meaning of a co-applicant is clear and you understand the pros and cons of opting for personal loans with a co-applicant, be sure to take informed steps before applying for a loan.

If your credit score or difficult eligibility terms are keeping you from applying for a loan, consider Fibe. At Fibe, you can get an Instant Personal Loan of up to ₹5 lakhs by meeting a few simple eligibility criteria. 

Even if you are new to credit, you can still opt for the service with us, as we use an alternate scoring mechanism to check your eligibility. Just download the Fibe Instant Loan App  or log in to our official website to apply digitally and get quick access to funds.

FAQs on Co-Application for a Loan

What criteria does a co-applicant need to meet when applying for a loan?

A co-applicant must have a healthy credit profile and a stable income. They also need to meet all the lender’s eligibility criteria. 

Who is eligible to be a co-applicant?

Co-applicants need to meet the lender’s eligibility criteria. Lenders allow family members to be co-applicants, which include:

  • Spouses
  • Siblings
  • Parents 

Is a co-applicant also an owner?

A co-applicant doesn’t need to be an owner or co-owner, but a co-owner can be a co-applicant.

Who can be a co-applicant on a personal loan?

Generally, only family members can be co-owners for a personal loan. These include:

  • Parents
  • Siblings
  • Spouse

What is the difference between co-owner, co-borrower and co-applicant?

Check out the difference between the following:

  1. Co-owner: A co-owner is a person who has a legal right to the asset.
  2. Co-borrower: A co-borrower has equal responsibility in repaying the loan, especially if the primary applicant fails to repay the loan. Note that they don’t have access to the loan amount.

Co-applicant: A co-applicant is the one who gets the loan amount and is responsible for its repayment.


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