Would you like to take out a loan for two people? – To be able to afford big common wishes or from an emergency?
We do not want to motivate you to borrow together or deter you from doing so. Use authentic information so that you make the right decision in individual cases. The article presents advantages and disadvantages as well as risks to be considered.
Credit for two – what is it?
A loan for two people is usually a jointly borrowed loan. Derived from this, the borrowing could fit together with a guarantor. In both cases, two people are fully liable to the bank.
The differences between a joint application for a loan and a loan guarantee exist primarily in the case of information rights and in the internal relationship of the bondholders.
Reasonable borrowing together – reasons
There are many reasons why people apply for credit together. The main reason should be because two borrowers have a common goal. A goal from which both partners share equally. They pool their personal creditworthiness for this and are jointly liable. Typical reasons would be building a house or buying home for young couples.
The common goal is “nest building” for the family, so there is no logical reason for the joint liability. It is only important that the two are not only jointly liable, but at the same time receive the rights arising over the property. It would also be conceivable to set up a joint company.
In this case, the partners do not share their private lives with each other, but their everyday work. If everything goes well with self-employment, there are many benefits from the loan for two people to found a company. However, it is important in all cases that the risk is not only spread over two shoulders. The benefits and the right to created values must always be associated with this on equal terms.
Joint borrowing – private loan relief
Not everyone in the family and the closest circle of friends is specifically focused on their personal advantage. On the contrary, sharing joy and suffering together bonds communities and shows true friendship. Shared joy rarely leads to problems. Everyone likes to share a lottery win with the people who are close to their hearts. It is not for nothing that it is said to have melted as won.
It becomes more problematic when the financial suffering of others motivates selfless help. Financial situations are often life threatening if a loan for two people is sought and offered as a friendship service. In this case, unfortunately, the next saying must apply – friendship ends with money. A joint loan application is not about small change, the loss of which everyone can easily bear.
Emotional reasons should not count as a basis for decision-making. Only your own economic security should count. Only those who remain financially unassailable can actually help their fellow human beings. If they are both in the same boat, then it is time to swim together or go down together.
The bank wishes the co-applicant
A relatively new reason to borrow for two people is found in the credit terms of some credit institutions. Married couples generally only get credit if they sign for it together. Whether only one spouse wants to take out a loan or not does not matter for the loan terms. To bow to the power of the banks would be the worst and probably the stupidest decision ever.
Legal independence for financial decisions is given up without any need or discernible advantages. The legislature deliberately designed the marriage in such a way that an automatic joint liability of the partner, except for trivial matters, is excluded. Everyone only has to fulfill contracts they have signed. In this case, avoiding arbitrarily prescribed joint liability is child’s play.
Fortunately, there are many other credit providers who respect the independence of every person and do not force them to assume joint liability. Every good free loan comparison shows countless loan providers that limit loan liability only to the person who needs the loan. The much lauded fair play in lending must also apply to lenders and not just borrowers.
Avoid credit for two people – poor credit rating
If the requested bank urges a co-applicant to lend, arbitrariness does not have to be in the background. All credit institutions within Europe are obliged to only grant credit if it can be assumed that lending will be secure. The purpose of this political stipulation is to protect systemically important banks against payment defaults and ultimately against collapse.
If the loan is requested for two people, the credit institution raises rational concerns about the borrower’s performance. In this situation there are two optional ways. First, everyone should check for themselves whether they can really afford their credit. (Fair play as it should be). The credit request is set. According to human judgment, the monthly installment payment can be made securely, on time and in full, then a change of provider would be advisable.