According to Investopedia, a co-applicant is a person who is seeking a loan in addition to the primary applicant. A co-applicant increases the chance for the loan to be approved.
Investopedia explains that co-applicants are used in the case of a large loan or when property is involved and both applicants are equally responsible for the asset.
Investopedia states that banks review the financial health and credit scores of both applicants. If both applicants have good credit history, the loan is granted with the applicants becoming co-borrowers. In this case, each borrower is financially obligated to repay the loan.