Spouse security for personal loans: What Indian borrowers need to know

Personal loans are gaining popularity across India for their easy availability and flexibility. Due to the same many borrowers question and wonder if their spouse’s security or co-signature is necessary for loan approvals.

The answer to this question largely depends on several different factors such as, the lender’s policies, the loan applicant's profile and the specific loan product the loan application has been submitted for. Still, to put it simply, there is no such rule that mandates spouse security for approval of personal loans.

Most personal loans do not require a guarantor or spouse's consent

It is important to acknowledge the fact that most of the personal loans in India are unsecured, meaning they do not need or require collateral or a guarantor, including spouse or near relatives.

Even as per the official websites of leading lending institutions such as HDFC Bank, State Bank of India, Kotak Bank, Bajaj Finance among others, eligibility is generally based on factors such as income, credit score, loan amount, employment status along with repayment capacity, not on spouse related security.

Now according to RBI, there are restrictions on lending to spouses of bank directors, still for general applicants there is no mandatory requirement for spouse security until and unless specified by the lender’s internal policies.

When do banks ask for spouses as co-applicant?

Several public sector banks such as UCO Bank, Bank of Baroda, Punjab National Bank among others may require the spouse to act as a co-applicant in specific cases, depending on the type of loan the borrower applies for and its associated terms and conditions.

Especially for pensioners or if the applicant's income or credit profile is relatively fragile. Now this is not a universal rule and varies from one financial institution to another.

Benefits of adding your spouse as co-applicant

Now it is also important to keep in mind that though it is not mandatory, still the addition of a spouse as a co-applicant can boost your eligibility, increasing the loan amount and sometimes help secure a better interest rate.

All of this is only possible if the credit score of the spouse is reputable and strong. Still, on a fundamental level, both applicants' credit profiles are analysed and missed repayments if any impact their credit scores and the interest rates applicable on future loan applications.

What are some key points for borrowers to consider?

• Most of the private lenders and fintech companies do not require or request for spouse security for personal loans.
• Your eligibility for a particular personal loan is primarily determined by your income, credit profile strength, credit score, and repayment history.
• Adding a spouse as co-applicant is optional. Still, it can be beneficial for higher loan amounts or better interest rates along with easier terms.
• Keeping all these factors in mind, do remember to always check the specific requirements of the lender before applying. Do also discuss your problems with the dedicated customer support team of your financial institution before submitting your personal loan application.
• Further, even if you are requested for a spouse’s guarantee or co-applicant status, check with the lending institution again and verify as per the official documents if it is a mandatory policy or only for special cases such as low income or pension loans.

Updated insights for 2025

As of May 2025, personal loan interest rates in India range from 10.30% to 24.00% depending on the lender and applicant profile. The trend towards digital lending and instant approvals means that documentation requirements are more transparent, and most lenders list their eligibility criteria online.

Personal loan interest rates 2025

Note: These rates are indicative and can vary based on factors such as your credit score, income, and loan tenure. It's advisable to check with the respective banks for the most current rates and terms.

Conclusion

Hence, to conclude it can be stated that spouse security is not a standard requirement for processing of a personal loan in India. Still, adding a spouse as a co-applicant can be beneficial in certain circumstances.

That is why, borrowers should always properly read the loan agreement terms and conditions, compare offers and consult the lender for clarification before moving ahead with their personal loan applications.

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