DEFINITION of 'Co-Applicant'

An additional person seeking to obtain a loan with a primary applicant. One reason a potential borrower might want a co-applicant is to increase his odds of qualifying for a loan or to qualify for a larger loan. A co-applicant is also desirable if the loan is for the purchase of property that will be owned equally by both borrowers, such as business partners or spouses.

BREAKING DOWN 'Co-Applicant'

For example, when a husband and wife apply for a loan, one will be listed as the primary applicant and the other will be listed as the co-applicant. The lender will examine the debt, credit scores and overall financial picture of both the primary applicant and co-applicant in deciding whether to extend the loan. If the loan is granted, the applicants will become co-borrowers, and each will be equally responsible for its repayment.

RELATED TERMS
  1. Direct Consolidation Loan

    A loan that combines two or more federal education loans into ...
  2. Loan

    The act of giving money, property or other material goods to ...
  3. Origination

    The process of creating a home loan or mortgage. During the origination ...
  4. Loan Officer

    Representatives of banks, credit unions and other financial institutions ...
  5. Character Loan

    A character loan is a type of unsecured loan that is made on ...
  6. Term Loan

    A loan from a bank for a specific amount that has a specified ...
Related Articles
  1. Personal Finance

    Personal Loans vs. Car Loans

    How to tell whether a personal loan or a car loan is better for you.
  2. Managing Wealth

    When Are Personal Loans a Good Idea?

    You never want to borrow money for frivolous reasons, but these five circumstances might warrant it.
  3. Personal Finance

    Understanding Loans

    A loan is the act of giving money, property or other material goods to another party with the expectation of being repaid.
  4. Personal Finance

    All About Government Loans

    There are many reasons to seek a government loan rather than one from a private lender. Government loans typically have low interest rates and offer fixed or subsidized options, as well as deferred ...
  5. Personal Finance

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  6. Personal Finance

    College Loans: Private vs. Federal

    Not all student loans are the same. Know what you're getting into before signing on the dotted line.
  7. Personal Finance

    Home Improvement Loans: What Are Your Best Options?

    If you plan on taking out a home improvement loan, you should know what your options are and which ones might be best for your situation.
  8. Personal Finance

    These 4 Moves Will Get You OK'd for a Bank Loan

    There’s no secret trick to getting approved for a bank loan, but there are some things you can do to put your best foot forward financially when applying.
  9. Personal Finance

    Understanding Term Loans

    A loan from a bank for a specific amount that has a specified repayment schedule and a floating interest rate.
  10. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
RELATED FAQS
  1. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  2. What are the differences between delinquency and default?

    Find out more about loan delinquency, loan default, and the difference between a loan borrower defaulting and being delinquent ... Read Answer >>
  3. What are the pros and cons of life insurance policy loans?

    Find out the pros and cons of borrowing against your life insurance policy to help you decide if this loan type is the right ... Read Answer >>
Trading Center