How will banks consider my eligibility if my father is the loan defaulter?

We, in life, take the support of our family members a lot of times. Right from birth till death we need family support to consider doing a lot of things. The same goes for when we try to opt for a financial product. Let’s take a situation here, you are in your 20s and landed your dream job, fortunately, you already have all the basics of life you need and you are earning for savings and making an investment.

On a Sunday morning, when you are going through the newspaper, you come across an advert about a second home bungalow which looks luxurious and you immediately make a plan to buy it so that you can gift it to your parents for retirement. You visit the site and quite like the property and put down the token amount and book it. In your next visit, you gather all your documents for loans and are quite sure of getting a loan with ease because you were never on the loan defaulter list in the past. You get a call from the bank stating you will have to add a co-borrower for your loan or else it’s hard to get your loan sanctioned. You think that’s ok because you can add your father as a co-borrower and expect the loan to get processed with ease. You encounter another problem that your father has a low cibil score and according to you it seems hard to get a loan and the only option you have is to pour in more down payment. Giving more down payments has never been on the cards because you already have exhausted your existing savings behind the down payment you made while booking. The question here is will you get the loan sanctioned if your father the co-borrower has a low cibil score?

The answer to this question is yes! You can get your loan processed even if you take support from a co-borrower whose cibil score is low. Well, it all depends on which type of loan are you applying for. If you are applying for a car loan, the bank considers your car as collateral and is ok giving you a loan on the basis of the low cibil score of your partner/co-borrower. Similarly, if you are applying for a home loan or loan against property you will get the loan sanctioned with ease even if the co-borrower is at a low credit score side. Before applying for the loan, you will have to do all the necessary homework and will have to make sure the bank does not reason you all this for increasing the interest rates.

Now coming back to another category, if you are applying for personal loans with your co-borrower having a low credit score, chances are your loan will get rejected. The reason being, this is one type of non-secured loan and the bank considers every aspect when it comes to verifying your past payment behaviors, this means there will be a thorough background check on cibil before giving the loan out. If you justify your low cibil situation to the lender there are chances they will get your loan sanctioned but it all depends on the sole discretion of the lender. In other words, all non-secured loans are hard to get sanctioned if your co-borrower has a low credit score and you can get the secured loan sanctioned with ease.

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