2 mins Read | 2 Years Ago

Co-Signer vs Co-Applicant for a Home Loan - Know the Difference


When you apply for a Home Loan, you can either be a co-applicant, co-signer, co-borrower or co-owner. And it is essential that you are aware of the legal and financial obligations, if you are a co-applicant or a co-signer. In this section, let us help you understand the difference between a co-signer and a co-applicant.

Are you purchasing a home loan? It is definitely considered as an added financial responsibility. Considering the cost and tenure, it may not be possible for one person to single-handedly manage the loan repayment. For this purpose, you have the option to apply for the loan along with a co-applicant or a co-signer. Before applying for the same, it is essential for you to understand who can be a co-applicant or a co-signer of the loan. Although the terms are used interchangeably, they have distinct roles and responsibilities. Let’s get to know the difference between the two:

  • A co-applicant is the one who applies with the primary borrower for the Home Loan and accepts to share the Equated Monthly Instalments (EMIs) and other responsibilities. A co-signer is the one who needs to pay, only when the Home Loan borrower is at default in making the loan repayment
  • Adding a co-applicant at the time of a Home Loan application, helps to improve your eligibility criteria for a higher loan amount. As a primary borrower, if you have a lower credit rating, you become less eligible for the loan. However, this is where the co-signer comes into the picture; if the individual has a high credit rating and has a decent income, he/she can make you eligible for the Home Loan
  • Due to an improved credit score of the co-signer’s profile, a primary borrower can avail loans at a lower interest rate. A co-applicant helps to share the Home Loan burden. Since a co-applicant is one of the parties to apply for the loan with the primary borrower, he/she can help to get them at an attractive interest rate
  • A co-signer is not responsible for paying your EMIs; however, the individual will be liable for the repayment of the loan, in case of a default on your part. As mentioned earlier, the role of the co-applicant in a Home Loan, is to share the responsibility of the loan repayment along with the primary borrower
  • If a co-applicant is also the co-owner (having a legal share) of the property, the individual is eligible to avail tax benefits. In case the applicant is not a co-owner, it is not possible to avail tax benefits. On the other hand, a co-signer cannot avail any tax benefits
  • Generally, while applying for a joint Home Loan, the co-applicant is most often a spouse. Banks and financial institutions apply certain conditions if parents and children seek joint approval. A co-singer for a house can be a friend or family member, with a good credit history and a solid income.

Applying for a Home Loan is the biggest financial liability. If you are a primary borrower, you need to be careful when you’re choosing someone to be a co-applicant or a co-signer. Once you select an option that is best for you, you can go ahead with the Home Loan. You can use a home loan eligibility calculator to know the eligibility of the loan amount if you are applying with a co-applicant and this will let you know how many EMIs you can afford.

Terms and Conditions apply.


For disclaimer, Click Here.

People who read this also read

View All


View All
2 mins Read | 2 Years Ago
What is RERA How can one check RERA approved projects
Home Loan

Scroll to top