- A co-applicant is equally responsible for the loan from day one and their income is counted.
- A guarantor promises to repay only if the borrower fails, and income is usually not counted.
- Both roles can affect their own credit report and ability to borrow.
Co-applicant (co-borrower)
A co-applicant applies jointly with you. The lender counts their income when deciding the amount, which helps if your own income is limited. Both of you are equally liable for the full amount, and both credit reports show the loan. In home loans, a co-owner of the property is usually a co-applicant.
Guarantor
A guarantor gives a legal assurance that they will repay if the borrower defaults. The lender may check their income and credit record, but usually does not add their income to calculate eligibility. The guarantor’s liability begins when the main borrower stops paying. A guaranteed loan can also appear on the guarantor’s credit report and reduce their own borrowing room.
Side by side
- Liability: co-applicant from the start; guarantor on default.
- Income counted: co-applicant yes; guarantor usually no.
- Ownership: a co-applicant may share ownership of the asset; a guarantor does not.
- Credit report impact: both can see effects, good or bad.
Before you agree to be one
- Only sign for a person you trust and for a loan you understand.
- Ask for statements and confirmation that EMIs are paid on time.
- Remember that missed EMIs can hurt your own score. Learn how the score works.
If you are the borrower and need a stronger application, read how to get a loan with a low score.
This article is for general information only and is not financial, legal or tax advice. Interest rates, fees and rules change, so confirm current terms with the lender or the regulator before you decide. Examples use illustrative figures. Last reviewed: October 2026.