Joint Personal Loans in India: Meaning, Eligibility & How They Work

A joint personal loan is a loan applied for and repaid by two people together, using their combined income and credit scores. This usually means a higher loan amount, better interest rates, and stronger joint personal loan eligibility than applying alone. Both borrowers stay equally responsible for repayment until the loan is closed.

Quick Reads

• A joint personal loan is a type of loan that combines the income of two applicants.

• Spouses, parent-child, and siblings are the most common co-applicant combinations for joint personal loans in India.

• Joint personal loan eligibility depends on factors such as both borrowers' job security and income. 

• With joint personal loans, you get access to quicker approval and usually a higher loan amount. 

• Both borrowers are liable for the loan amount and have to bear the credit impact on their CIBIL scores.

Joint personal loans are a form of loan where two applicants apply together to get funding with their combined income and credit profile. Both individuals are jointly liable for the repayment, which makes it different from an individual personal loan where responsibility falls only on the primary borrower. A joint personal loan is more beneficial when a person’s income or credit rating alone doesn’t qualify them for a loan. 

A couple can go for a joint personal loan for reasons like marriage, medical treatment, home renovation, or repayment of another loan. Having another person’s income and credit rating can allow you to get a higher loan amount or a lower interest rate. 

This blog covers how joint personal loans work in India, their eligibility criteria, and whether it is the right option for you.

Essentially, joint loan’s meaning is quite straightforward. It is a loan agreement between two parties where both should fulfill their obligations and responsibilities toward the lender. In India, joint personal loans are usually taken by:

• Spouses

• Parents and children

• Siblings

• Close family members

Jointly applying for a loan involves much more than the simple convenience of filling out one form instead of two. This is a quick overview of what a joint application actually means: 

1. Both applicants are equally responsible for paying the EMI. 

2. Payments not made on time impact both borrowers and their credit scores.

3. Both borrowers are legally liable for the loan amount. 

4. Lenders determine your total approved loan value by combining the earnings of both co-applicants.

However, a joint application comes with greater responsibility, as it requires a higher degree of trust and transparency. It is important that both parties have a clear understanding of who will be paying what and by when.

To get a joint personal loan in India, you must follow a few mandatory steps. 

Step 1: Choose a Co-Applicant

You pick a co-borrower. This is typically a spouse or eligible family member, according to the lender's policy.

Step 2: Combined Eligibility Assessment

The lender analyzes both borrowers' combined income, credit scores, ages, job or business status, and existing liabilities.

Step 3: Approval

Once the application meets the criteria, the lender may approve it based on the borrowers' income and ability to repay. However, a joint application does not necessarily mean approval.

Step 4: Disbursal and Repayment

The lender typically transfers the loan amount to the main applicant's bank account, as per its procedure. Both borrowers must repay the loan, and the EMI can be debited directly from either applicant's bank account, if the lender allows it.

Joint personal loan eligibility refers to the factors a lender considers when two applicants apply for a personal loan together. This is what lenders may check before approving one:

• CIBIL score and credit history. 

• How steady your income is, regardless of whether you're working a standard job or working for yourself.

• Applicants’ ages and the proposed loan tenure. 

• Existing EMIs, liabilities, and other financial commitments. 

• The applicants’ residential status and identity documents, as required by the lender.

• Whether the relationship between the applicants is permitted under the lender’s policy.

Both applicants will generally have to meet the requirements of the lender. Having a good credit history will help the application, but the lender can review each applicant’s credit history on an individual basis.

Applying with someone who has a stable income and an excellent credit history can increase the chances of approval. However, it will not ensure approval or offset the other applicant’s low credit score, insufficient income, or poor payment history

While joint personal loans are helpful in balancing the scores of two individuals, they also come with downsides. These are the limitations you should be aware of: 

• Late or missed payments can damage the credit scores of both borrowers.

• Regardless of any issues between the borrowers, both are held responsible for the loan. 

• An argument over who pays the EMIs or how the money should be used can cause tension in a friendship or relationship.

• Applying for a joint loan can increase the amount borrowed by either or both of the borrowers and impact future credit eligibility.

A little planning can go a long way: discuss who will be paying the EMIs and how much each person is responsible for paying, should one be unable to pay

Joint personal loans can work well when handled responsibly. Such loans give holders more opportunities to borrow larger amounts at lower rates and make payments more comfortably.

However, a joint personal loan can also create a shared obligation. Understanding the risks and opportunities helps borrowers feel more confident about their decisions and the consequences. If you already have a strong independent credit score and a stable income, you can also consider a personal loan. At Finnable, we provide personal loan of up to ₹10 lakhs with low EMIs and quick disbursal.