What is the difference between a co-applicant and a guarantor?

Availing an instant personal loan isn’t difficult if you are doing so with a joint venture. Be it a guarantor or a co-applicant, we all have help in hand if we learn to ask. But how do a guarantor & a co-applicant differ?

This article clarifies this and also persuades you to choose the wiser options while availing an instant personal loan. Today, Buddy Loan is one of the biggest loan aggregators that has dispensed personal loans with lower interest rates starting at 11.99%p.a., customized EMI options, etc.

However, will a co-applicant or a guarantor ease your burden on repayment or credit score? We shall check that below:  

Co applicant for a personal loan

In order to get a better deal on your personal loan, we avail a co- applicant or a co-borrower. Your loan approval or eligibility increases if your co-applicant has good income & credit score.

The next question is who can be co-borrowers? In most of the scenarios, it is usually the family members, like your spouse or parents. Of course, there are lenders who allow your siblings to be allocated as co-applicants too.

Similarly, of the co-applicant has any bad credit score or a bad income proof, the chance of availing a loan is likely low. In here, a default will affect both the scores.

Guarantors in personal loan

Usually, banks require guarantors before they approve of any personal loans. A guarantor is a person or institution who is liable for the loan as a principle borrower. A guarantor gives the consent to the lender that they will be backing the borrower in case of defaults. 

But not every personal loan is a “guarantor” personal loan. Banks and other financial institutions prefer guarantors with good income over Rs. 25000 to qualify for a consent.

A guarantor should be aware of the consequences of the loan default and will bear the responsibility of repayment in case of borrower’s default. A guarantor loan is an unsecured loan whose signature is mandate on the credit agreement.

To remind you so, Buddy Loan disburses all personal loans as unsecured loans, yet with lower interest rates & customised EMI options. 

Conclusion

A personal loan eligibility is always dependent on you majorly, however, a co-applicant and a guarantor serve as a catalyst in loan approval.

What are the different types of personal loans in India?

When a fixed amount of money is lent to the borrower with a fixed repayment time, it is called personal loan. They do have a fixed interest rate over the repayment tenure. Further, personal loans are segregated to two other categories, unsecured and secured, which we shall discuss more on. 

Buddy Loan offers a solution to each of your financial nuance, with a wide pool of lenders. It disburses unsecured loans, yes loans without a collateral with lower interest rates starting at 11.99%p.a.  

Types of loans:

Personal loans are of two types, basically, secured and unsecured. Secured are those loans which require an asset from the borrower, whereas unsecured needs no collateral at all.

With the highest loan approval rate in the industry, Buddy Loan offers a solution to each of your financial nuance at your fingertip. The below 9 types are the basic types available now.

·         Business 

·         Travel

·         Two-wheeler

·         Car/four-wheeler

·         Education

·         Medical

·         Home

·         Gold

·         Marriage  

You can definitely enhance your credit score if you’ve a poor credit history but with higher interest rate and as you keep with your EMIs you can make up your credit score. Checking your credit score every once in 4 months can help you gauge the graph and the following benefits from it. Buddy Loan disburses loans starting from Rs. 1000 to Rs. 15 lacs.

Business loan: A personal loan that is availed on business enhancement during a financial shortcoming.

Two/ Four – wheeler loan: This is the easiest personal loan to avail to buy a vehicle at on road price.

Travel & Education Loan: Instant loans for overseas travel and education. Travel loan covers all the expenses from accommodation to holiday planning, while education loan covers the yearly tuition fee and its education laterals.

Home & gold Loan: A personal loan i.e. approved on the basis of home improvement loan, land acquisition, construction, or home refurbishment.

Medical Loan: Often known as the emergency loan is availed on the grounds of medical emergencies and for treating health issues.

The new adage:

·         Festival loan

·         Top-up loan

·         Bridge loan

·         Agricultural loan

·         Pension loan

·         Personal computer loan

The overall personal loan in India have a variety of reasons and names to make availability more diversified and easier.  

Conclusion:

It is by far easy to avail and repay the instant personal loan as the process is hassle free and involves very minimal documentation. All the personal loans mentioned above are asserted with specific interest rate and a tenure extending from 3 months to 5 years.