What is a joint application personal loan?
A joint personal loan is a loan you take out with another person. In many cases, this person is a spouse, partner, friend or sibling. This person is known as the co-borrower. The co-borrowers in a joint personal loan are jointly liable for the debt meaning one will be responsible if the other is incapable of meeting repayments.
The below table displays some personal loans on Canstar’s database that joint applicants may be eligible for. Please note that the Star Fatings for products in this table are based on a $20,000 loan over 3 years in NSW. Products are sorted by star rating, then alphabetically.
Why take out a joint application personal loan?
There are a number of reasons – you might be interested in sharing an asset with a close friend or loved one you’d like to pay off together, or you may be keen to secure a larger loan. It may also be an appealing option if you are unable to meet out the loan requirements set out for individuals.
Before making a decision we’d recommend you consider some of the following points:
- You both need to meet the loan criteria
- You will both be equally responsible for the repayments
- You may be eligible for a higher loan amount than you would be by yourself
It’s a good idea to closely assess the person you’re applying with. Are they reliable, or have they had a history of poor finances and reckless spending? Are they selfish with money? If they’re a partner, are you likely to still be with this person over the life of the loan? Canstar doesn’t generally give relationship advice, but it might not be a good idea to take out a personal loan with a girlfriend or boyfriend you just met…
How to apply
Applying for a joint loan can be just as easy as applying for a regular loan. You simply need to provide your personal and financial details, which the lender will assess as one application instead of two. You will generally be approved or rejected within three business days, depending on the lender you choose.
What can go wrong with a joint application personal loan?
Getting a loan with another person is a major responsibility, and unfortunately, not everyone takes that responsibility seriously. If your co-borrower runs out of money, vanishes or just straight up refuses to pay it back, you will be stuck with the bill. Remember: the lender only needs to chase up one person, not two. The financial obligation you agreed to will need to be met, and a failure to do so can result in legal action.
If you end up having problems with your co-borrower, the Australian Securities and Investment Commission (ASIC) recommends seeking legal advice to ensure you are protected.
A final summary: pros and cons of joint application personal loans
The table below shows a basic overview of the advantages and disadvantages that come with taking out a joint application personal loan.
|Pros and cons of joint application personal loans|
|Potential greater chance of approval||You have to rely on the other person’s repayments|
|You can be approved for a larger loan||You can be liable for the whole payment if the other person fails to make their repayments|
|You can consolidate larger debts||The lender can pursue one person for legal action if it isn’t repaid|
If you’ve decided you’re ready and willing to take out a joint application personal loan, then you can compare what’s available with Canstar: