The introduction of a guarantor helps an applicant enhance their chances of availing the best loan terms for financing their purchase of a new home. The guarantor is not a co-applicant or co-borrower who will split the burden of loan repayment with the borrower but is supposed to step in when the borrower is unable to keep up the repayments, to plug the gap in EMI payments, so the borrower does not default on the home loan.
Having a co-applicant when you apply for a home loan is one of the easiest ways to bypass the need for a guarantor. This is because the criteria for eligibility that one needs to meet, like income, credit score, etc., cumulatively increase when two people apply together for a loan. Therefore, your scope for getting affordable home loans with low interest rates also increases.
Improving your creditworthiness is another great way to improve your eligibility for a home loan and getting it approved without a guarantor. Your CIBIL Score is an important factor that is taken into consideration by a lender when determining whether or not your application will be approved. So, always check your credit score before turning in your application. Luckily, if your credit score is a bit low, there are several steps you can take in order to raise it.