Home Loans are popular lending arrangements that have fulfilled the dreams of many people of owning a house. However, to get a Home Loan, you need to fulfil the lender’s eligibility criteria and provide all the documents required for a Home Loan. If you fail to meet the eligibility criteria for the Home Loan, a good option is to bring a co-applicant. But how to remove co-applicant from Home Loan once they become a party to your loan? Let’s find out!
Who is a co-applicant?
A co-applicant / co-borrower is a person who applies for the loan along with the primary applicant. The co-applicant shares the responsibility for loan repayment with the borrower and shall be equally liable as the borrower in case of any default. Having a co-applicant can also help you get affordable Housing Loan interest rates.
The idea behind considering a co-applicant for a Home Loan application is that their income and credit score improve the chances of getting the Home Loan application approved. The income and credit score of both the primary applicant and co-applicant are considered for the loan application.
How to remove co-applicant from Home Loan?
You might wonder whether you can remove a co-applicant from the Home Loan. The answer is yes. Removing the co-applicant from the Home Loan requires consent of both the primary and co-applicant. Here are some of the ways to remove a co-applicant from Home Loan:
1) Novation
You can request the novation from your lender. In novation, you can request to replace the co-applicant with another person or only with the primary applicant. However, you need to check whether your loan agreement allows for the same. For a novation, you must provide a written request to your lender, the original loan agreement, and any other relevant document that may fit the lender. Also, you need to furnish a valid reason for the novation.
2) Fulfilling eligibility criteria
If you wish to remove the co-applicant, you must ensure you continue satisfying the eligibility criteria. You might be required to provide certain documents to your lender, such as proof of assets, income proof, credit score, bank statements, etc. This helps lenders assess whether you are capable of repaying the loan without the co-applicant or not.
3) Refinancing of loan
If your existing lender doesn’t allow you to remove the co-applicant, you can consider refinancing your loan. This requires you to apply to transfer this loan to a new lender and make the new loan application in your name only. This will automatically remove the name of the co-applicant.
Also Read: Meaning, eligibility & benefits of co-applicant in Home Loan
In a nutshell
Home Loans are long-term loans that usually run for years. You might have to remove the co-applicants' names from the loan during the tenure for any reason. Having the right lender ensures that you can remove the co-applicant seamlessly if you satisfy the criteria. Axis Bank has been the borrower’s choice for Home Loans because of its affordable solutions, quick loan processing and flexibility. Visit the Axis Bank website now!
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision
