What Is a Co-Applicant?

A co-applicant is someone, with the same citizenship as you, who requests to file on your behalf. They are persons who can apply for a loan with you. They are allowed to sign documents, make decisions about your application, and provide information on your behalf. 

Moreover, they are going to be on the mortgage with you, and they’re going to contribute an equal percentage of your down payment as well as take responsibility for the repayment of this loan. 

This person must be able to show proof of their relationship with you (for example, a marriage license). A co-applicant does not have to be a spouse or relative. 

If you do not have proof of your relationship with the co-applicant, then a statement from a third party may be used in its place.

Who Can Become a Co-Applicant?

Co-applicants should be at least twenty-one years of age. To get someone to act as your co-applicant in any financial transactions, these are who you can choose from:

  • Spouses
  • Common-law spouses (including conjugal partners) 
  • Dependent children
  • Parents and grandparents

If someone is not related to you but has lived with you for at least 12 months, they may act as your co-applicant if they can show proof that they have been financially dependent on you (for example, supporting them for at least 12 months).

Responsibilities of a Co-Applicant

As a co-applicant in any underwriting and approval of a loan or any application, it is his responsibility to:

  1. Submit all documents to the lending institution.
  2. Provide information for you as the applicant.
  3. Keep records of all communications with banks or financial institutions.
  4. Act in your best interests and not just for his gain.

If he fails to fulfill any of these responsibilities, then it will be easily identified that an ethical breach has occurred.

Benefits of Having a Co-Applicant

There are a lot of advantages of having co-applicants in applying for any financial transactions.

  • One is that there is a reduction of work for an individual.
  • He keeps records of all communication and documents received from various institutions.
  • On this basis, one can say that there is more assurance in the approval process than when an applicant goes alone, especially if he does not know what to do or where to go.
  • Another is that there is the ease in locating financial institutions for this purpose.
  • In the absence of any co-applicant, an applicant can be left stranded without any facility to turn to.
  • Some financial institutions will reject applications if the applicant is alone. However, with a co-applicant, one can go anywhere and still get approved for his loan or other financial transactions despite not knowing anyone there

Disadvantages of Having a Co-Applicant

There are also disadvantages of having a co-applicant in applying for any financial documents. 

  • One is that most financial institutions will require the presence of both co-applicants at the time of application or during processing. 
  • Another disadvantage is that there is no assurance on whether or not he will be helpful, thus there may be delays and misunderstandings.
  • In addition, it is difficult to remove a co-applicant when loans are approved because the responsibility of the loan will be shouldered by both parties even if one may not have anything to do with it.

How to Tell if You Need One or Not

There are some guidelines that can help you determine whether or not you need a co-applicant. One can tell if he needs a co-applicant by the following:

  1. If the applicant has not been employed for at least two years after graduation, then it is highly likely that he will need co-applicants in loan applications. 
  2. If the applicant is a minor or under twenty-one years of age, then he will need co-applicants in loan applications. 
  3. If the applicant has no fixed address and lives with relatives/friends, then it is highly likely that he will need co-applicants in loan applications.
  4. If there is no proof of income or employment, then it is highly likely that he will need co-applicants in loan applications.
  5. If the applicant has no savings, then it is highly likely that he will need co-applicants in loan applications. 
  6. If the applicant is still being supported by his parents/relatives, then it is highly likely that he will need co-applicants in loan applications.

How to Apply for a Loan With a Co-Applicant

Steps to Apply for a Loan With a Co-Applicant

Here are the steps on how to apply for a loan with a co-applicant:

Step 1: Gather All Documents

Before applying for any loan, it is advisable to gather all required documents. The following are recommended: 

  • Loan Form (sometimes, this would be automatically sent by the lender)
  • Passport copy of both applicants
  • Proof of identity such as any government-issued document (e.g., birth certificate, college ID)
  • Proof of income (e.g., pay slips) 
  • Property Documents (if applying for a mortgage) 
  • Employment contract (if employed)
  • Bank statements (checking and savings accounts; if co-applicant is not employed, also include proof of income such as pay slips)
  • Credit card account (if co-applicant has one)
  • Savings account passbook (if co-applicant has one) 

Step 2: Fill Up the Loan Forms

After gathering all the required documents, you can now fill up the loan forms. 

Ensure that you provide accurate information about yourself and your co-applicant so that there will be no delays in processing. You can choose to have your loan processed online or through a walk-in service at the financial institution’s office.

Step 3: Submit Necessary Documents

Check if all of the required documents are present, then submit them to the proper department. 

Step 4: Wait for an Approval Letter or Call

Once all the application details are submitted, wait for either an approval letter/call from the lender. 

Step 5: Sign Loan Documents and Start Availing of Your Loans

After receiving a call or email from the lender confirming your application, sign the necessary loan documents and start enjoying your financial benefits. 

Please keep your co-applicant in mind because he will be responsible for the loan if you are not able to pay it.


Applying for a loan can be stressful, but it is even more daunting without a co-applicant. Some people think that this should only be done by married or engaged couples who have been together for a while.

Being responsible means being mature enough to handle your finances because once you have signed the loan documents, you are responsible for everything that is included in your loan agreement, including interest rates and late fees. 

It may come with a price, but it can also bring significant benefits if handled carefully. If you can work together with your co-applicant in applying for a loan, then it will be worth it.

A Co-Applicant is an individual who has signed the loan along with the borrower. This person must qualify for the loan on his merit/background and then he signs as a co-applicant to support the borrower in getting loan approval.
If the applicant is not able to make timely payments for the loan, then it becomes the responsibility of the Co-Applicant to make sure that the loan will be paid.
Having a co-applicant not only makes getting loans easier but also helps in saving time and effort.
It is, however, advisable to go for a co-applicant only after verifying his background and record with the lender. If there is no such requirement, then the individual can apply for a loan at one place by just fulfilling some formalities.
If one has bad credit history then he may not be eligible for getting a loan. In this case, his co-applicant can help in getting loan approval.
True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, his interview on CBS, or check out his speaker profile on the CFA Institute website.