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Difference Between Co-signer and Co-Applicant

Nov 20, 2023
Co-signer vs Co-Applicant in Home Loan - Know the Difference

One of the most important decisions you'll make on your path to homeownership is how to acquire a mortgage for your dream home. Two terms frequently appear in this context: co-signer vs. co-applicant in a home loan. While they may appear to be the same at first glance, they have quite different implications and duties in the context of a house loan.

In this post, we will look at the key contrasts between these two roles and shed light on their relative benefits and drawbacks.

By the end, you'll have a better idea of whether a co-signer or co-applicant is the best option to assist you in achieving your homeownership goals.

Who is a Co-Signer in Home Loan?

A co-signer on a house loan is someone who stands in for the primary borrower to guarantee the loan's repayment. They are not normally involved in property ownership but play an important role in obtaining loan approval.

The co-signer effectively provides their own creditworthiness and financial stability as a guarantee for the loan, assisting the principal borrower in qualifying for the mortgage and, in many cases, resulting in more favorable loan terms. They do not, however, have any ownership rights in the property and are primarily liable if the borrower fails on the loan.

Who can be a Co-Signer for Home Loan?

A co-signer for a home loan can be a family member, a friend, or anyone else willing to take on the financial risk. Lenders often seek co-signers with an excellent credit history, consistent income, and a low debt-to-income ratio. Common possibilities include parents, siblings, and close friends.

Husband and Wife

A husband and wife can both be co-signers on a mortgage. This type of arrangement is extremely frequent, and it is typically referred to as a "co-borrower" scenario rather than a traditional co-signer. When both spouses are co-borrowers on a home loan, they share equal repayment responsibilities and shared ownership of the property.

Father and Son

A father and son can also serve as co-signers on a mortgage. During the loan approval procedure, the lender will assess both the father's and son's creditworthiness and financial stability. Having both people as co-signers may increase the primary borrower's chances of loan approval and result in better loan terms.

Parents And Unmarried Daughters:

Parents and unmarried daughters can absolutely co-sign on a property loan. This arrangement could include the parents and their unmarried daughter applying for the mortgage together. The lender will assess each co-signer's credit history, financial stability, and contribution to the household income during the loan approval process.

Who is a Co-applicant in Home Loan?

A co-applicant in a house loan is someone who applies for the loan with the primary borrower and shares ownership of the property.

A co-applicant, unlike a co-signer, is not only a guarantor but has equal rights to the property and is participating in loan repayment. When accepting a loan, lenders assess both the principal borrower's and co-applicant's creditworthiness and income, which can help improve loan eligibility and secure favorable terms.

Must Read: Home Loan Guarantor (Role and Responsibility)

Who can be co-applicant for Home Loan?

A spouse or partner who plans to share property ownership is frequently a co-applicant for a house loan. Lenders assess their creditworthiness as well as their revenue. While spouses or partners are the most typical co-applicants, other family members, such as parents or children, can also apply for a house loan to jointly secure the property.

Husband and Wife

Co-applicants for a house loan are typically a husband and wife who share property ownership and loan liability. When approving a loan, lenders consider the borrower's combined creditworthiness and income, which may result in more favorable terms. This arrangement enables both partners to invest in their homeownership ambitions jointly.

Father and Son

A father and son can apply for a home loan together, sharing ownership and financial obligation. When approving a loan, lenders consider the borrower's overall creditworthiness and income. This co-applicant arrangement allows both generations to work together to achieve their homeownership goals.

Parents And Unmarried Daughters

Parents and unmarried daughters can apply for a home loan together, allowing them to jointly own the property and share the financial liability. This arrangement helps families achieve their homeownership goals while also improving loan eligibility and terms for all parties involved.

Read More: How To Claim Tax Benefits On Joint Home Loans

Differences Between a Co-Signer and Co-Applicant

Terms Co-Signer Co-Applicant
Loan Responsibility A co-signer provides a guarantee for the loan but is not typically responsible for the loan's repayment unless the primary borrower defaults. A co-applicant shares equal responsibility for repaying the loan and jointly owns the property with the primary borrower.
Credit and Income Consideration Lenders assess the co-signer's creditworthiness and financial stability to boost the primary borrower's loan eligibility and terms. Lenders evaluate both the primary borrower's and co-applicant's credit histories and incomes when approving the loan.
Ownership Rights A co-signer has no ownership rights to the property and is primarily a guarantor. Co-applicants have joint ownership of the property, with equal rights to it.
Legal Implications A co-signer's primary responsibility is to step in if the borrower defaults, potentially affecting their credit and financial situation. Co-applicants share legal ownership, which involves the responsibilities and benefits associated with property ownership.

How to Choose a Co-Signer and Co-Applicant?

While choosing a Co-Signer and Co-Applicant, consider the following:

For Co-Signers:

Trust and Responsibility: Choose a co-signer you completely trust, as they will function as your financial safety net if the need arises. It is critical that your co-signer understands the potential ramifications of your loan failure.

Credit history: A co-signer with a solid credit history is essential for obtaining better loan terms. Look for someone with a high credit score and a track record of sound financial management.

Financial Stability: Choose a co-signer with a steady salary and little debt. This guarantees their ability to intervene if required.

For Co-Applicants:

Shared Ownership Objectives: Co-applicants, who are often partners or family members, want joint ownership. It is critical that your homeownership goals coincide, and frank discussions about how to share responsibilities and advantages are essential.

Financial Compatibility: Co-applicants' financial profiles should be compatible. Their combined income and creditworthiness should increase your loan eligibility and boost loan terms.

Legal Implications: Understand the legal implications of joint ownership to ensure that all parties are comfortable with shared obligations such as property upkeep and decision-making.


In the realm of house loans, the decision between a co-signer and a co-applicant might be crucial to your homeownership goals. Your decision should be based on your financial circumstances and home-buying goals. This process can be a little tedious. But at SMFG Grihashakti, we aim to simplify the procedure as much as possible.

Our SMFG Grihashakti Home Loans come with easy-to-follow steps and a customer-centric approach to make your loan application process as seamless as possible. With minimal processing time and documentation, our priority is always you. Check out our loans now!


What is the Difference between a First Applicant and a Co-applicant?

The first applicant is the primary borrower, while a co-applicant shares equal responsibility for a home loan and jointly owns the property.

Can a co-applicant be removed?

A co-applicant can typically be removed from a home loan if the lender allows it and the primary borrower meets the eligibility criteria.

What is the role of a co-applicant in a Home Loan?

A co-applicant plays a crucial role in sharing financial responsibility and property ownership in a home loan application.

Can a co-applicant apply for another Home Loan?

A co-applicant can apply for another home loan if they meet the lender's requirements and can manage the additional financial commitment.

Can a co-applicant be added later to an existing Home Loan?

A co-applicant can be added later to an existing home loan if the lender permits and both parties meet the necessary criteria.

How do I find a co-signer or co-applicant?

Finding a co-signer or co-applicant often involves approaching trusted family members, friends, or partners who are willing to share the loan responsibility.

What is the Difference between a Co-applicant and Guarantor?

A co-applicant shares ownership and financial responsibility, while a guarantor only commits to covering the loan if the borrower defaults, without ownership rights.

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
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