Your personal goal should decide whether to take out a loan with the partner or whether everyone acts for themselves. There is no blanket “right” or “wrong” when applying for a loan together. Each individual case is different.
With examples and information we would like to support you in making the right decision in your individual case. Find out what advantages joint application for credit offers, but also what risks are lurking.
Taking out a loan with a partner – advantages
Couples are particularly often faced with the question of whether to take out a loan with the partner or not. The joint application for credit paves the way to achieve major goals together. Whether a trip around the world would be jointly financed or an asset in kind would play a subordinate role for credit institutions. Loans applied for together noticeably expand the scope for credit requests.
Not only one person guarantees the jointly applied for loan, but both applicants with their good names. The bank’s view of the credit check is illustrated by an example. If the couple were to work in the same safe job, at the same income level, one could roughly speak of a doubling of creditworthiness for lending.
Taking out a loan with your partner is primarily an uncomplicated procedure. Almost any credit request, always dependent on the overall credit rating for lending, could be fulfilled. A typical example of loans that are mostly only granted to married couples jointly would be home loans. An applicant alone, unless he had an extremely secure and adequate income and a high equity component, would probably fail.
Liability Risk – Disadvantages of Shared Loans
Every medal has two sides. The extended credit rating is based on the joint liability risk. Using an example, a joint car loan shows the disadvantages. Both applied for the loan together. The bank doesn’t care who drives the non-comprehensive car in front of the tree. She gets her money regardless of the question of guilt. Both partners owe the money for the purchase.
If the “original payer becomes unemployed or the couple separates, it does not matter for the existing loan. Even those who actually own the car in the event of a separation are no indication of the repayment obligation of both contracting parties. If one of the signatories cannot or does not want to pay, the bank requests the other borrower to pay the total amount. If both do not pay, both receive the negative private credit checker entry.
Taking the common risk can be legitimate. But taking out a loan with your partner should not be taken for granted. It must always be tied to a common goal, from which both sides enjoy advantages and accept disadvantages. If only one side has the advantages, it would be unfair to let the partner be liable. For example, if HE wants to buy a sports car and cannot afford it, it would be his problem.
It cannot be the spouse’s job to give the partner benefits without a hint of benefit. If the goal of marriage were to be “clan-like”, there would be no clear legal rules.
Legal liability – no automatic liability for the partner
Upon entering marriage, none of the partners gives up their ability to act independently for contracts. The legislator limits the automatic joint liability to a minimum. Liability for the breakfast sandwiches together is different than for the partner’s credit from a failed self-employment. The fairly clear separation of finances is of course unpleasant for credit institutions.
Enforcement against property of a couple if only one of the two is liable for the loan would be a game of chance. The property can be moved back and forth almost arbitrarily, in accordance with the untangeability. Some credit institutions, such as good credit, therefore state in the application conditions that couples must take out credit with their partner. Whether with or without a marriage certificate is also irrelevant for the good credit loan.
The signature of the partner is required as soon as both share the apartment. The predicament would have to be avoided to be signed, only by changing providers. Suitable loan offers can be easily found using a free loan comparison. Instead of just looking at interest rates, it’s worth studying the loan terms. There is no shortage of offers. Even with bad credit private credit checker, the co-applicant or guarantor can be avoided.
Self-employed – take out a loan without a partner
Inviting married couples to apply for credit together can be tedious, but it’s easy to get around. It would be different with self-employed and freelancers. At least in the first few years they face stiff resistance when they don’t want to take out a loan with their partner. Credit institutions require the signature of a co-partner or no credit is granted.
Smava, for example, offers a solution to this often existential problem. The credit brokerage portal enables access to credit from private customers – without guarantors or co-applicants. Lending to self-employed is of course no safer for investors than for a bank.
It is possible not to take out a loan with the partner, but to assume personal responsibility through the bidding process. Each investor only invests a small amount, the investment risk remains reasonable.