When taking a housing loan, there may come a situation when our eligibility in terms of quantum of funding or tenure of loan could be lesser than what we want. Is that the end of the road? No, the way out is in bringing in a co-applicant….

Who is a co-applicant?

A co-applicant refers to a person who applies along with the borrower for a loan. This is done so that the income of the co-applicant can be used to supplement the borrower’s income and increase his/her eligibility.

Can anyone be a co-applicant?

No, Banks and housing finance companies (HFCs) have allowed only a few specified relations to be co-applicants. Although, it must be noted that it is not compulsion or legal requirement to have a co-applicant. Banks also do not allow a minor to be a co-applicant.

We also need to note that any co-owner has to compulsorily be a co-applicant to the loan.

Who can be a co-applicant to my home loan?

Most of the banks in our country allow a few specified relations to be co-applicants. Brother-brother, father-son, mother-son, husband-wife etc are acceptable combinations for borrower and co-applicant.

Father and son

In case of father and son, if the borrower is the only son, then, he can jointly apply with his father where both of their incomes will be taken into consideration. The property should be in their joint names.

In case a person has two or more sons and if he wants to apply jointly with one of them or both of them, then he should not be the main owner of the property. This is because, on his death, his children should succeed to the property jointly and may cause an inheritance dispute. In this case, the father can only be taken as co-applicant and his income may be considered for the loan. He may be the co-owner or not own the property at all.

Unmarried daughter and father

An unmarried daughter is eligible to apply jointly with her father. In this case, unlike father and sons, the property has to be only in the name of the daughter and the income of the father should not be considered. This is to avoid any legal complications later on  when the applicant is married.

Unmarried daughter and mother

An unmarried daughter is eligible to apply jointly with her mother. In this case, unlike father and sons, the property has to be only in the name of the daughter and the income of the Mother will not be considered.

Brother and Brother

A brother may apply with his brother, provided, they are currently staying together and be determined to do so in the new property as well.

Husband and wife

One can include one’s spouse as a co-applicant for a home loan. His or her income will be included for working out of loan eligibility. In fact, from a bank’s perspective, this is an ideal situation and they would be very happy to have the husband/wife as co-applicant.

Who cannot be co-applicant?

As can be understood from the above discussions the following relationships cannot be a co-applicant for a loan:

  • Married daughter & Mother/Father
  • Sister and Sister
  • Sister and Brother

What is the role of a co-applicant?

A co-applicant is completely responsible for the loan if the partner defaults, dies or otherwise refuses to participate in the partnership. The bank will pursue collection from one applicant without consideration of the partnership agreement.

Experts say that technically, a co-applicant becomes a co-borrower and by being a co-borrower, he is liable for the repayment of the loan and other dues.

Thus, a co-applicant becomes equally liable for repayment of the loan amount in case of non-payment by the borrower. The co–applicant will also be responsible for repayment of the loan in case of death of the primary borrower, even if there is insurance cover to the primary borrower.

Many banks and financial institutions insist on having a co-applicant but it is more of a necessity than a requirement. There is no legal requirement to have a co-applicant.

Benefits of having a co-applicant

  • Success rate of your loan approval could be better
  • Increased eligibility can help you buy a bigger house and get a bigger loan too
  • Tax benefits for both the applicants and co-applicants
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  1. Very Good. Its really informative

    Sri / Reply
  2. Can Two Directors be co-applicant having no blod relationship in between them?

    Bhuvneshwar / Reply
  3. This article is having very useful and important tips/ knowledge about co-applicant. I really do not know previously that the role of co-applicant. Thanks for providing the such information. rppathak/ solapur/ maharashtra

    rppathak / Reply
  4. What happens when husband/wife go for a divorce? How does a bank guarantee that the co-applicant in this case will repay?

    xyz / Reply
  5. Can you please advise how to add my spouse as co-applicant? I availed the loan before marraige; now I would like to include my spouse as co-applicant. But when enquired in the bank, co-applcant could not be added now and should have been added while applying for loan. Is there no way to add my spouse as co-applicant at this stage? Please advice.

    Cute doll / Reply
  6. A bank has issued a housing loan in name of 2 co borrowers (husband & wife) can the wife whose name is second claim housing loan interest & principal for relief in income tax in her return when she actually pays the loan instalments from her taxable income ? Kindly reply. I am an STI subscriber.

    Moiz / Reply
  7. Can i take home loan with my brother's wife. Means can take joint home loan

    sameer / Reply
    • No, Sameer. You can not avail a home loan with your brother's wife, none of the banks or the housing finance companies allow this.

      praveen / Reply(in reply to sameer)
  8. this is very much unfair with daughters ..as married daughter and her father home loan is not possible..
    even though daughters financial s good ..

    very much unfair for girls in INDIA ….. very much depressing ..

    naina / Reply
  9. Can one purchase a property and register in others name or include others in the registration (When purchaser take the loan from home bank)

    abc / Reply
  10. house is in my wife's name and she is not employed. Can i get home loan in my name to construct further ?

    suresh / Reply

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