Fibe

Getting a joint personal loan is a great option to avail of a sizeable loan amount if you’re unable to meet the lender’s criteria independently. With the fintech advancements, personal loans are more accessible than ever, but availing them can be a hassle if you don’t meet the lender’s criteria. 

To overcome this, lenders allow you to apply with a co-applicant or co-borrower. This can be a spouse, parents or siblings with a good credit history and income. A joint loan is not only a viable solution to boost your eligibility but also helps you secure better loan terms. 

Read on to learn more about a joint personal loan and things to consider before applying for it. 

How Joint Personal Loan Works

A personal loan is an ideal option to meet all types of financial requirements, as it does not have an end-use restriction. However, not having an optimal credit score or a minimum monthly income can lead to rejection or loan offers with a high-interest rate. So, the quickest way to boost your eligibility is to apply with a co-applicant having a good credit score and higher income. 

To apply, both applicants submit the required documents to get a joint personal loan. They also share the burden of repayment, which means they have equal EMIs. They have equal ownership over the funds as well. 

Things You Should Consider  

Consider these factors when opting for a joint loan to ensure easy repayments for all the parties involved. 

• Eligibility Criteria 

Both co-applicants must meet the lender’s parameters to get loan approval. While the specific parameters may vary slightly, here are some common joint personal loan eligibility criteria you can refer to.  

Parameter	Requirements
Nationality	All Indians can apply
Age	Any individual between 21 years and 55 years of age can apply
Employment	All salaried employees with a stable job and working in MNC, public or private limited companies can apply
Minimum In-hand Income	You must have ₹15,000 in non-metro cities and ₹18,000 in metro cities to apply but it may vary depending on lenders

• Credit Score 

Most lenders consider credit scores under 750 less-than-ideal. In this case, you can get a joint personal loan with your family member if they have a higher credit score. This will boost your chances of approval and get a loan at a lower interest rate.

• Debt-to-Income Ratio 

Since you and the co-borrower are equally responsible for repaying the loan, both should have a debt-to-income ratio under 40%. Lenders check this to verify if you can afford the EMIs. If either of you have many ongoing loans, this will directly impact your borrowing capacity. 

• Income 

Lenders consider combined income in a joint loan, so choosing a borrowing partner earning a considerable sum every month is imperative. 

• EMI Amount 

When deciding on a suitable monthly instalment, both borrowers must choose an amount that fits their budget. If one of them fails to make the payment, both their credit scores can take a hit. So, you should decide on a comfortable amount beforehand. 

• Interest Rates 

When you opt to get a loan with a co-applicant, it gives lenders better repayment assurance. You can leverage this fact to negotiate for a lower interest rate, reducing the financial burden on both borrowers. 

Now that you know all the key points for a joint personal loan application, you can get started by choosing from various digital lenders. One such option is the Fibe Instant Cash Loan, which allows you to get a loan amount of up to ₹5 lakhs at competitive interest rates. 

With Fibe, you don’t have to worry about a low credit score or time-consuming application process. This is because of our alternate credit score system through which we can offer funds even to those who are new to credit.

Furthermore, we have a completely digital application with no physical paperwork or visits required. Another reason to opt for Fibe is its flexible tenure option, 2-minute disbursal, zero foreclosure charges and more. Download our Personal Loan App or apply on our website now. 

FAQs on Joint Personal Loan

Is it better to get a joint personal loan?

Getting a joint personal loan boosts your eligibility and increases your chances of approval. It also helps you opt for a large amount at a lower interest rate than applying for a loan independently. 

How does a joint loan work?

With a joint personal loan, you apply with a co-borrower who shares the ownership over the loan account. Lenders assess their eligibility and offer a loan based on combined income and repayment capacity.  What’s more, all the borrowers share the responsibility to repay the instalments.  

How many people can be on a joint loan?

There is no legal limit for the number of borrowers on a joint account personal loan, and it depends on the lender’s policy. 

A credit builder loan is a small, structured loan designed primarily to help you establish or improve your credit history through regular repayments. Unlike a traditional loan, where you usually receive the money upfront, the lender may hold the loan amount in a secured account while you make fixed monthly payments. 

Your repayment activity may then be reported to credit bureaus. Making repayments on time can help establish a positive repayment record, although it does not guarantee a specific increase in your credit score. 

Credit builder loans may be useful for people who are new to credit or are trying to rebuild their credit profile after previous repayment issues. While such products are available from certain lenders in India, their structure, eligibility requirements and availability can differ significantly. 

What Is a Credit Builder Loan? 

A credit builder loan is a type of credit facility specifically designed to help borrowers establish a repayment history. 

Unlike a conventional personal loan, its primary purpose is generally not to provide immediate access to funds. Instead, it creates an opportunity for the borrower to demonstrate consistent repayment behaviour. 

In a typical credit builder loan: 

1. You apply for a relatively small loan amount. 

2. The lender holds the approved amount in a secured account or similar arrangement. 

3. You make fixed monthly instalments over the agreed tenure. 

4. The lender may report your repayments to applicable credit bureaus. 

5. Once the repayment schedule is completed, you receive access to the amount held, after accounting for applicable fees or charges. 

The exact structure can vary between lenders. 

This arrangement reduces the lender’s exposure because the funds are generally retained until the repayment requirements are fulfilled. At the same time, it allows borrowers to establish a record of managing credit responsibly. 

Why Does a Credit Builder Loan Improve Your Credit Score? 

A credit builder loan may help your credit profile because your repayment history is an important part of how creditworthiness is assessed. 

When an eligible lender reports your loan account and repayments to credit bureaus, regular on-time payments can contribute to a positive repayment history. 

This can help in several ways. 

Builds a Repayment Track Record 

If you are new to credit, lenders may have limited information about how you manage borrowed money. 

A credit builder loan can help establish a repayment record over time. 

Demonstrates Responsible Credit Behaviour 

Paying every instalment on time shows that you can manage recurring financial obligations. 

This repayment discipline may contribute positively to your overall credit profile. 

Adds an Instalment Loan to Your Credit History 

A credit builder loan may add an instalment credit account to your credit report where the lender reports it to the relevant credit bureau. 

Helps Rebuild Credit Over Time 

If your credit history has been affected by previous missed or delayed payments, consistent repayment on a new account may help demonstrate improved financial behaviour. 

However, there is no guaranteed number of points by which your credit score will increase. Your score depends on several factors across your overall credit report. 

Similarly, missing payments on a credit builder loan can negatively affect your credit profile if the lender reports those delays to the credit bureau. 

Pros and Cons of a Credit Builder Loan 

Before applying, understand both the potential advantages and disadvantages. 

Pros 

1. Helps Establish Credit History 

Regular repayments may help build a positive credit history if they are reported to the relevant credit bureaus. 

2. Designed for Credit-Building 

These products are generally intended for borrowers with limited credit history or those attempting to rebuild their profile. 

3. May Improve Access to Future Credit 

Building a stronger repayment history may improve your profile when you apply for other credit products in the future. 

However, future approval will still depend on each lender’s eligibility and credit-assessment criteria. 

4. Can Encourage Saving Discipline 

Because the funds may remain inaccessible until the repayment period is completed, the structure can create a forced-saving effect for some borrowers. 

Cons 

1. Missed Payments Can Hurt Your Credit Profile 

The same reporting mechanism intended to help your credit can work against you if you miss or delay repayments. 

2. Funds May Not Be Available Immediately 

Unlike a conventional personal loan, a typical credit builder loan may not provide immediate access to the borrowed amount. 

It is therefore generally unsuitable for emergencies requiring immediate cash. 

3. Interest and Fees May Apply 

Depending on the lender, you may have to pay interest, processing fees or other applicable charges. 

This means credit building can come at a financial cost. 

4. Limited Availability 

Credit builder loans are not offered by every Indian bank or NBFC. 

You may therefore have fewer products to choose from compared with conventional personal loans. 

Who Should Consider a Credit Builder Loan? 

A credit builder loan may be worth considering if you fall into one of the following categories. 

New-to-Credit Individuals 

If you have never used a loan or credit card, you may have little or no repayment history for lenders to assess. 

A credit-building product may help you begin establishing one. 

Borrowers Rebuilding Their Credit Profile 

If previous delayed or missed payments have affected your credit history, disciplined repayment on a new credit facility may help demonstrate improved financial behaviour over time. 

Young Borrowers Starting Their Credit Journey 

Young professionals who have recently begun earning and have limited credit exposure may use credit-building products to establish a repayment record. 

Borrowers Who Do Not Need Immediate Funds 

Credit builder loans generally make more sense when your objective is building credit rather than meeting an urgent financial requirement. 

They may not be suitable if you require immediate access to the loan amount. 

People Who Can Commit to Regular Payments 

You should consider this type of loan only if you are confident that you can make every instalment on time. 

Missing payments can defeat the purpose of taking a credit-building product. 

Steps to Get a Credit Builder Loan Online 

If you are considering applying for a credit builder loan online, follow these steps. 

1. Research the Right Lender 

Not every bank or NBFC offers a dedicated credit builder loan. 

Research lenders that specifically provide this product or a similar credit-building facility. 

Before applying, verify the lender’s credentials and understand whether repayments are reported to recognised credit bureaus. 

2. Compare the Available Options 

Compare different products based on: 

• Interest rate 

• Processing fees 

• Loan amount 

• Repayment tenure 

• Monthly instalment 

• Other applicable charges 

• Credit bureau reporting 

• Conditions for accessing the held funds 

Do not choose a product based solely on the lowest EMI. 

3. Choose a Manageable Loan Amount 

The primary purpose of the loan is to demonstrate consistent repayment behaviour. 

Therefore, choose an amount that results in an EMI you can comfortably pay each month. 

Borrowing more than necessary simply to build credit can put unnecessary pressure on your finances. 

4. Complete the Online Application 

If the lender offers digital applications, visit its official website or mobile application and provide the required details. 

This may include your: 

• Personal information 

• PAN and KYC details 

• Employment information 

• Income details 

• Bank account information 

5. Review the Terms Carefully 

Before accepting the loan, check: 

• Interest payable 

• Processing and other fees 

• EMI amount 

• Repayment dates 

• Loan tenure 

• Conditions for releasing the funds 

• Treatment of missed payments 

• Credit bureau reporting arrangements 

Read the applicable loan agreement and Key Fact Statement carefully. 

6. Make Every Payment on Time 

Once your loan starts, prioritise timely EMI payments. 

You can consider setting up an auto-debit or repayment reminder to minimise the risk of missing a due date. 

Consistent repayment may help establish a positive repayment history, provided the lender reports the account to the credit bureaus. 

Documents Required for a Credit Builder Loan 

Documentation requirements vary from one lender to another. 

You may typically be asked to provide some of the following: 

Identity Proof 

Common documents may include: 

• PAN card 

• Aadhaar card 

• Passport 

• Driving licence 

Address Proof 

Depending on the lender, this may include: 

• Aadhaar card 

• Passport 

• Utility bill 

• Other accepted address documents 

Income Proof 

The lender may request documents such as: 

• Recent salary slips 

• Bank statements 

• Income-related documents for self-employed applicants 

Employment Details 

You may be asked to provide information about your employer, occupation or business. 

Bank Account Details 

An active bank account may be required to set up repayments and eventually receive the funds. 

Photograph or Digital Verification 

For online applications, the lender may require a photograph, selfie or digital KYC verification. 

Always check the specific lender’s current documentation and eligibility requirements before applying. 

Credit Builder Loan vs Personal Loan 

Although both are loans, their objectives and structures are quite different. 

Feature	Credit Builder Loan	Personal Loan
Primary Purpose	Building or rebuilding credit history	Meeting personal financial needs
Access to Funds	Typically after completing repayments	Usually after approval and disbursal
Typical Loan Size	Usually relatively small	Can be significantly higher
Credit History	Often targeted at new-to-credit or credit-building borrowers	Credit profile can influence eligibility and terms
Repayment Reporting	Central to the credit-building purpose	Generally part of normal credit reporting
Best Suited For	Building repayment history	Immediate financial requirements

If you need funds immediately, a traditional personal loan may be more appropriate than a credit builder loan, subject to eligibility. 

Alternatives to a Credit Builder Loan 

A credit builder loan is not the only way to establish a credit history. 

Depending on your circumstances and availability, alternatives may include: 

Secured Credit Cards 

Some secured credit cards are issued against a fixed deposit or other security. 

Using the card responsibly and paying bills on time may help build repayment history. 

Small Credit Facilities 

Using a manageable credit facility and making payments regularly can help establish repayment behaviour where the lender reports the account to credit bureaus. 

Existing Loan Repayments 

If you already have a loan, simply continuing to make every EMI on time can help maintain a positive repayment record. 

Becoming Credit-Aware 

Regularly checking your credit report can help you spot errors, understand your active accounts and monitor repayment information reported by lenders. 

Credit Builder Loans and Fibe 

A Fibe Personal Loan is not positioned as a dedicated credit builder loan. It is a personal loan intended to provide eligible borrowers with access to funds for their financial requirements. 

However, Fibe also allows new-to-credit customers to apply for a personal loan. Applications are assessed using internal policy checks, credit bureau information, income models and other risk indicators. 

Eligible customers can currently apply for a Fibe Personal Loan of up to ₹10 lakh, with repayment tenure ranging from 6 to 36 months. The published personal loan interest rate starts at 18% p.a. on a reducing-balance basis, subject to eligibility and the approved offer. 

You can check your eligibility through the Fibe website or Personal Loan App. 

As with any credit product, borrowing responsibly and making repayments on time is important. A personal loan should primarily be taken because you need the funds and can comfortably repay them, rather than solely for the purpose of trying to increase your credit score. 

FAQs on Credit Builder Loans 

1.How does a credit builder loan work? 

A typical credit builder loan works in the following way: 

1. You apply with a lender offering the product. 

2. You select an eligible loan amount and repayment tenure. 

3. The lender holds the loan amount in a secured account or similar arrangement. 

4. You make fixed monthly instalments. 

5. The lender may report your repayment activity to credit bureaus. 

6. Once you complete the repayment schedule, the held funds are released to you after applicable charges or adjustments. 

Making repayments on time may contribute positively to your credit history, but it does not guarantee a specific increase in your credit score. 

2.Are credit builder loans secured or unsecured? 

The classic credit builder loan structure is generally secured by the funds that the lender holds while you make repayments. 

Unlike a traditional secured loan, you may not have to pledge an existing asset such as your property or vehicle. Instead, the loan proceeds themselves may remain inaccessible and provide security for the lender during the repayment period. 

However, product structures and terminology vary between lenders. Always review the individual loan terms before applying. 

3.Is a Credit Builder Loan Available in India? 

Yes, some lenders and NBFCs in India offer products described as credit builder loans or similar credit-building facilities. 

However, they are less widely available than conventional personal loans, and the structure can vary considerably between providers. 

Before applying, confirm that you are dealing with a legitimate lender and understand how the product works, including whether and how repayments are reported to credit bureaus. 

4.Can I Apply for a Credit Builder Loan Online? 

Yes, where the lender offers a digital application journey, you may be able to apply online. 

You may need to provide KYC information, income details, employment information and bank details and complete the lender’s eligibility checks. 

Always apply through the lender’s official website or authorised application. 

5.What Happens If I Miss a Payment on a Credit Builder Loan? 

Missing or delaying an EMI can work against the purpose of a credit builder loan. 

If the lender reports the delayed payment to a credit bureau, it may negatively affect your credit history. You may also incur applicable late-payment or other charges according to the loan agreement. 

Choose an EMI you can comfortably manage and consider using auto-debit or payment reminders to reduce the chances of missing a payment. 

6.Does a Credit Builder Loan Guarantee a Higher Credit Score? 

No. A credit builder loan does not guarantee that your credit score will increase by a particular amount or within a particular period. 

Credit scores are calculated using information across your overall credit profile. Timely payments may contribute positively, while factors such as existing debt, missed payments, credit utilisation and recent credit enquiries can also influence your score. 

7.How Long Does It Take to Build Credit with a Credit Builder Loan? 

There is no fixed period in which a credit builder loan will improve your score. 

The impact depends on factors such as your existing credit history, repayment behaviour, other active credit accounts and when the lender reports information to the credit bureaus. 

The important factor is maintaining consistent, timely repayments throughout the loan tenure.