Joint Personal Loan

1. Applicant must be an Indian citizen. 

1. Applicants should be between 21 years and 60 years of age. 

1. Applicants should be working in a public or private limited company, or a multinational corporation (MNC). 

1. The minimum income should be at least Rs.25,000 per month. 

1. Applicants should be graduates with a minimum of one year of work experience. 

1. The credit score should be above 750. 

1. The co-applicant must fulfil the lender's KYC (Know Your Customer) requirements. 

Factors Affecting Joint Personal Loan Eligibility 

The factors that impact the eligibility of the Joint Personal Loan are given below: 

1. Relationship Between Co-Applicants: Married couples are often seen as lower-risk borrowers compared to friends or unrelated co-applicants. 

1. Loan Amount and Tenure: Higher loan amounts and longer repayment periods may require stronger credit scores or higher income levels to qualify. 

How to Improve Eligibility for Joint Personal Loan? 

A higher credit score increases your chances of joint loan approval. You can improve your credit score by: 

1. Paying bills on time 

1. Lowering your credit utilization 

1. Correcting any errors on your credit report 

Boost your combined income or savings to meet eligibility by: 

1. Taking a part-time job 

1. Reducing non-essential expenses 

Who Can Be a Co-Applicant? 

A co-applicant is someone who applies for a loan jointly with the primary borrower, sharing equal responsibility for loan repayment. Lenders consider the eligibility, credit score, and income of both applicants. Typically, co-applicants can be a close family member, such as parents, spouses, or siblings. 

How to Apply for A Joint Personal Loan? 

The process to apply for a joint personal loan are mentioned below: 

1. Both applicants must fill out the joint loan application with their personal and financial details. 

Each applicant needs to provide the following documents: 

1. Aadhaar card 

1. PAN card 

1. The last three months’ salary slips or income proof 

1. Last six months’ bank statements 

1. The submitted documents will be reviewed and the credit score of both applicants will be evaluated by the lender. 

1. The loan will be approved, and the funds will be credited to the primary borrower's bank account after successful verification. 

Pre-Closure of Joint Personal Loans 

Banks offer pre-closure options for joint personal loans at additional pre-closure charges. Consistently on time payment of loan EMI is vital for maintaining a healthy credit score. 

Calculating Joint Personal Loan EMI 

Understanding your Equated Monthly Instalment (EMI) is essential when planning a joint personal loan. 

Formula for EMI Calculation: 

EMI=P×R×(1+R)^N(1+R)^N−1  

Where: 

1. P = Loan amount (principal) 

1. R = Interest rate 

1. N = Loan tenure in years 

A personal loan EMI calculator helps estimate your monthly instalments, total interest, and overall repayment amount. 

Key Factors to Consider for Applying for Joint Personal Loan 

The significant factors that should be considered before applying for a joint personal loan are mentioned below: 

1. Credit Score Impact: Approval of a joint personal loan depends on the credit score of the primary applicant. In case of poor credit score, the credit score of co-applicants can be of help. But if either borrower defaults, it negatively affects both applicants' credit scores. 

1. Debt-to-income ratio: It is important to assess the co-applicant's gross income and expenses to ensure that there is enough disposal amount for loan repayment. High debt-to-income ratio indicates a reduced chance of repayment of loan amount to the lenders. 

1. Loan tenure: Assess your and your co-applicant's financial condition to determine the loan tenure and EMI amount before applying for a joint personal loan. Long tenures have low monthly payments but lead to high total interest. While short tenures have large monthly payments but with a reduced amount of interest. 

1. Extra Documentation: Both applicants must submit paperwork, which can make the process more time-consuming. 

1. Shared Repayment Responsibility: The co-applicant is equally responsible for repayment; if they default, the primary borrower must repay the entire loan. 

1. Limited Availability: The availability of joint personal loans and eligibility criteria may vary depending on the banks or financial institutions. 

A good credit score can help you secure lower interest rates on loans and credit cards.

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