There are many reasons to consider a joint personal loan, including sharing the payment obligations, securing better financing terms, and improving your odds of approval. So, if your credit history is holding you back from getting favorable interest rates and terms on your own, having a co-borrower could help you qualify for a personal loan. However, there are some pros and cons to consider before you apply.
Here’s what you need to know about how to get a joint personal loan, how they work, and what to consider before applying.
A joint personal loan, also sometimes called a joint-applicant loan, is a personal loan with two co-borrowers.
When you and your co-applicant submit an application, the lender will review both incomes and credit histories to determine your eligibility and loan terms. This arrangement can be beneficial if two people want to share the loan funds and both have good credit.
But the joint nature of the loan doesn’t stop there. If approved, both borrowers are fully responsible for paying back the debt. That is, even if a co-borrower was added to improve their chances of obtaining the loan and plans to pay back the debt on their own, both borrowers are responsible if the primary borrower misses a payment.
Note that a joint loan with two borrowers can be different than a co-signed loan, depending on the lender.
As with personal loans with just one borrower, you can generally use the funds for most purposes, such as debt consolidation, home improvements, vacation and wedding expenses, financial emergencies, and more.
Some lenders may also have restrictions on how the funds can be used, prohibiting usage for educational, business, or investment purposes, for buying or exchanging cryptocurrency, or for engaging in illegal activities. Make sure to review the fine print before applying to understand whether the loan will meet your needs.
Not all lenders that offer personal loans allow the applicant to add a co-borrower to their application, so it’s important to review your options to ensure that you can do what you want with a co-borrower.
You can find joint personal loans at most banks and credit unions and with online lenders like LendingClub Bank, where you can check your rate without affecting your credit score. As with any financial decision, it’s important to shop around and compare multiple options to determine the right fit for you.
Once you’ve settled on a lender, visit its website to get started. Here are some steps to help guide you through the process of getting a personal loan:
There are both advantages and disadvantages to applying for a personal loan with a co-borrower, and it’s crucial that you understand both to determine if it’s the right choice for you.
While they seem similar on the surface, there’s one key difference between a joint personal loan and a co-signed loan. With a co-signed loan, the co-signer is agreeing to pay back the loan if the primary borrower doesn’t, but they don’t have any claim on the loan funds or the items purchased with the funds.
In contrast, a co-borrower on a joint personal loan has equal rights to the loan proceeds and anything those funds are used to buy.
You may opt for a co-signed loan instead of a joint loan if you don’t want the co-signer to have any claim on the funds or the items or services you purchase with them. Alternatively, you may consider a joint loan if you both plan to use the funds together.
Maybe. A borrower with a damaged credit history stands a better chance of qualifying and receiving a loan when applying together with a co-borrower who has a good credit history. However, it may make sense to leave a borrower with bad credit off a loan application if the other can get approved on their own.
Yes. You can apply for a joint personal loan with a co-borrower at LendingClub Bank. If you’re not sure you’ll qualify on your own, you might want to consider applying for a joint personal loan along with someone else, as long as they have a stronger credit profile that will improve your chances of approval.
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