This is a very common question we get.

Let me guess, you want to get an OFW loan but the bank or lending company requires you to have a co-borrower.

So, what is a co-borrower?

A co-borrower is someone whose name also appears on a borrower’s loan application when applying.

Not everyone is required to have a co-borrower on their loan application. But if this is a requirement that your bank or lending company has give to you, here is some more info on what this means.

To qualify for a loan, your co-borrower must also prove that she or he has an established income, is a Filipino citizen, prove their residential address and relationship to you also.

A co-borrower is someone who agrees to join in the responsibilities of the borrower in availing a loan. In case the borrower did not meet the bank’s criteria by themselves in a solo loan application, the co-borrower’s qualifications may help meet the bank’s lending requirements.

Your co-borrower will also need to show the bank that he/she has a good credit score, is willing to own the responsibility and be held liable in an event you are unable to make the repayments for the home loan.

Who can be a co-borrower?

Below is the usual list of who the major lending companies in the Philippines consider a co-borrower to be:

• If the borrower is unmarried, his parents and siblings can be a co-borrower as long as one can meet the qualifications and requirements.
• If the borrower is married, the spouse can be his or her co-borrower and share the same rights over the house
• Borrower’s children who are employed with income.
• Close relatives who proved to be creditworthy and with good credit standing
• A blood relative with no credit score can also be a co-borrower as long as the principal borrower meets the qualifications and requirements to avail a loan.

A General Note About Co-Borrowing and Therefore, Co-Ownership:

If your co-borrower is your father or brother and he has already paid the amount which you are unable to, he has a partial right on the property. But if your spouse is your co-borrower, you both have equal rights on the property. (this is a very general guide and it does not consider your personal situations. Speak with a legal professional if you have questions about this).

Who CANNOT be a co-borrower?

If you are the borrower and you can’t qualify to avail a home loan, thinking of and applying with the co-borrowers listed below will likely end with your loan application being denied or delayed as you need to provide extra paperwork and requirements

Co-borrowers are usually not:

1. A person having a bad credit score
2. Persons who can’t prove his creditworthiness, no stable income and assets and properties
3. A person who is not related to you by blood.
4. A person who is not your legal married partner.

Does a co-borrower need to be working?

The short answer is: Yes.

If the borrower can’t assure the bank that she/he is qualified and failed to complete the essential requirements for a home loan, then the co-borrower needs to be working and has a regular income.