What is '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.