Joint Personal Loans

Applying for a personal loan as part of a joint application can help you tick more eligibility boxes than you can on your own. For this reason, it can be a useful solution for prospective borrowers who have yet to build up a credit rating (for example, students and young people), have bad credit, are on a lower income or have been rejected for finance elsewhere. It’s also a way for partners to assume equal financial responsibility for a large purchase.

Several lenders offer joint applicant personal loans. This guide will shed some light on these loans and how this type of financing works.

How do you apply for a joint personal loan?

You and the person you’re applying with will provide personal, employment and financial details as part of the application. This may be done in one application or in separate sections. The lender will consider the application details as a whole when considering both your eligibilities for the loan.

What do I need to know before applying for a joint personal loan?

Before you start your application, there are a few things to consider:

• If you are approved, you will assume equal responsibility for the loan with the person you are applying with. This means if either one of you becomes unable to repay, the other is still responsible for the repayments.
• Both applicants will need to meet the criteria for the personal loan.
• You may be eligible for a higher loan amount when submitting a joint personal loan application. It’s important not to take on more of a loan than you need or can afford, even if you are approved for it.
• Joint personal loans are a serious responsibility. Consider the relationship you have with the person you’re applying with and their financial situation. Is their job stable? What is their credit history like? Are they likely to default? These are the things you will need to think about when taking on the responsibility of a loan.

Is a joint personal loan right for me?

What are the benefits and drawbacks of applying with another person? These loans are an option for several reasons, and they provide a variety of benefits, as well as factors to consider. Here are some of the pros and cons:

Pros

• Increase your chances of approval. If you are on a lower income, self-employed or just want to bolster your application, a joint personal loan can be a way to do it. The details of both applicants will be considered by the lender.
• Share an asset. If you're planning to share the asset you're purchasing, such as buying a car with your partner, a joint application could make more sense than one of you applying by yourself. Consider your own personal situation to decide what will work best for you.
• Be eligible for a larger loan. You may be eligible for a larger loan if you apply with a partner. As you both agree to manage the repayments, the lender will consider the income and financial situation of both applicants when deciding how much to lend you.
• Consolidate large debts. If you and your partner have large debts separately, you can both save by applying for a joint debt consolidation personal loan. Split the monthly repayment according to how much debt you contributed to the loan and benefit from the reduced interest and fees.

Cons

• Joint responsibility. If your co-borrower refuses to or is unable to meet repayments (even in cases of death), you will likely legally have sole responsibility of paying back the loan.
• Risk of over-borrowing. Because you are combining two incomes, getting a joint personal loan often means that you can qualify for a higher amount than you would do if you applied alone. While this can be a positive, it can also carry the risk of you taking out more finance than you are able to comfortably repay.
• Relationship tension. It's a fact that money can cause problems within any relationship. Therefore, it's important to ensure that the person you are borrowing with is not only capable of repaying the loan alongside you, but is also emotionally responsible enough to share a debt with.
• Credit rating. If you or your loan partner defaults on the repayments, both of your credit ratings will take the hit.

Who should I apply with?

While people are generally more likely to apply for joint personal loans with their partner or spouse, you are not limited to doing so when it comes to joint personal loans. However, please be aware that you are only able to apply for a joint personal loan with 2 people, not more. You can choose to apply with:

• A parent. Getting a joint personal loan with a parent can help younger people to build their credit rating, while making it easier for them to qualify for finance. However, if you would prefer to have your own loan, but with the help of a parent, a guarantor personal loan could also be an option.
• Your sibling or relative. If you want to make a large joint purchase, or perhaps go on holiday with a sibling or other relative, you can take out a joint application personal loan with them to help you both cover the cost.
• A friend. There's nothing to prevent you from getting a joint personal loan with a friend. However, be aware that finances can cause a strain on relationships, and it can be risky to get a loan with a friend.
• Your partner. Getting a loan with your spouse or romantic partner is the most common form of joint personal loan.

Which lenders offer joint applicant personal loans, and are there any conditions?

Lender	Joint applications accepted?	What personal loans can you apply for jointly?	What conditions are there?
ANZ		Fixed rate, variable rate loans and car loans	To be eligible you must apply over the phone or in a branch.
Bankwest		Car loans and unsecured personal loans	Up to 2 people can apply.
Bank of Melbourne		-	-
BankSA		-	-
Citi		-	-
CommBank		Variable rate, fixed rate and secured car loans	To be eligible you must apply over the phone or in a branch.
CUA		Fixed and variable rate personal loans.	Up to 4 people can apply.
Fair Go Finance		-	-
Gateway Bank		Secured car loan and unsecured personal loan	You can apply, but you need to download and fax the application or call Gateway.
Latitude Financial Services		Secured and unsecured personal loans	Up to 2 people can apply.
IMB		New car loans, unsecured and secured personal loans	You need to be applying as married or de facto joint borrowers.
loans.com.au		Car loans	Up to 2 people can apply.
ME Bank		Unsecured personal loan or car finance	Up to 2 people can apply.
NAB		Unsecured fixed and variable rate loans and car loans	Up to 2 people can apply.
NRMA		Car loans	Up to 2 people can apply.
Plenti		-	-
RACV		Car loans, personal loans and debt consolidation loans	Up to 2 people can apply.
SocietyOne		-	-
St.George		-	-

Joint personal loans can be a convenient option, no matter what reason you’re applying for. Think about who you are entering into the agreement with, both your and their ability to manage the loan, and whether you’re taking on the right loan for the both of you.

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