Have you planned to apply for a loan with your spouse? This can be a good idea in many respects, as getting a co-applicant into the loan application process brings many benefits. For example, it is often possible to get a better deal on a loan offer with a co-applicant than on your own, as the other applicant gives the lender additional security for repayment. Thus, it may be possible for a co-applicant to obtain a higher loan amount or a lower interest rate on the loan.
What is a “parallel applicant”?
A co-applicant or co-applicant refers to a person applying for a loan together with a lead applicant. As the lead applicant, he is responsible for the entire loan amount. A co-applicant is most often a partner or spouse, but a friend, a parent of an adult child or other relatives may also be a co-applicant.
Banks and financial institutions, like the main applicant, generally impose a few conditions on the parallel applicant. In most cases, there is a certain age limit for being eligible for a co-applicant. In addition, the co-applicant must be resident in Finland, have a regular income and have a good credit history. These terms, however, vary slightly depending on the company that lends the loan.
Why apply for a loan with a co-applicant?
The biggest benefit of applying for a loan with a co-applicant is that your chances of getting a loan are improved. In addition, it is often possible to obtain a larger loan with a co-applicant than when applying for a loan alone. With a co-applicant, it is also usually possible to get better loan terms and a lower interest rate on a loan. In addition, applying for a loan with another person is usually more financially viable and safer. So you will not have problems even if you are not able to repay the loan installments for some time due to financial problems, for example.
When should a co-applicant be particularly involved?
If your income is irregular or low, you should consider whether it would be possible for you to involve a co-applicant in the loan application process. Often, the granting of a loan is conditional on regular, fixed monthly income. For example, some banks have a minimum monthly income limit of $ 2,000. If your income is below this or fluctuates monthly, your chances of getting a loan will greatly improve if you apply for a loan, even with your spouse.
According to a co-applicant, it may also be wise to take on a loan if the amount of the loan applied for is large, for example, when taking out a mortgage. Two applicants applying for a loan together are more likely to be granted a large loan amount than one applying for a loan alone.
What are the obligations of a parallel applicant?
The co-applicant is also responsible for the entire loan amount, not just half the loan. If the principal applicant is unable to pay the loan due, for example, to financial difficulties, the co-applicant will be responsible for repaying the loan. The principal applicant and the co-applicant are thus equally liable for the total amount borrowed.
How do I apply for a loan with a co-applicant?
Applying for a loan with a co-applicant is usually as easy as applying for a personal loan. You can apply for a loan at most banks and financial institutions either online or by calling. Usually, the loan application directly asks if there is a parallel applicant for the loan. The bank may even suggest that you include a co-applicant if you are applying for a large loan amount. Once the loan application is completed, both applicants must sign it. Thereafter, both applicants are jointly and severally liable for the repayment of the loan.