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Is it better to get a joint loan? Pros & Cons

Joint Loans

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Is it better to get a joint loan? Pros & Cons

Before making an application, it’s important to explore the pros and cons of a Joint Loan to determine whether it is the right borrowing option for you.

A joint loan can be an effective borrowing option for couples, business partners and family members. It can be used for a wide range of purposes such as home improvements, large purchases and debt consolidation.

However, depending on your circumstances, you may decide a joint loan is not the most appropriate financial solution for you. So, before you begin to question ‘is it better to get a joint loan?’, take a look at these pros and cons to help you make a more informed decision.

Pros of a joint loan

Applying for a joint loan can often mean that the lender is able to consider more income than if you were applying for an individual loan which means you and your partner are more likely to be able to borrow a larger loan amount. This is perfect for partners looking to make substantial home improvements or large purchases.

Joint loans can also be an effective way to get a loan, despite any previous rejections or a poor credit score. As there will be two people contributing to the repayment of the loan, it can make it less risky borrowing option for lenders. A joint loan can help individuals to improve their financial situation by partnering with someone who has a more attractive credit rating and can share the responsibility of the loan.

As well as helping you to reach your financial goals, a joint loan can be used to consolidate your debt with the support of a family member or partner. A joint loan can make it possible to secure a loan amount to pay off any existing loans or previous debt and can make your financial situation more straightforward to manage through one monthly repayment, rather than accounting for numerous payment due dates.

If you are successful in getting a joint loan, the regular repayments can even help to improve your credit score and the shared responsibility can result in more manageable payment amounts compared with a personal loan.

Cons of a joint loan

Although there are plenty of pros for committing to a joint loan, there are also some potential disadvantages. Like any major financial decision, it’s important to assess your current situation and other borrowing options before applying.

The shared-responsibility that comes with a joint loan can help you to borrow a larger amount of money. However, you and your partner must understand that you are both 100% responsible for repaying the loan regardless of any change in circumstance. This can cause issues if there has been a break down in the relationship or disagreements regarding the payment amount. Essentially, even in the event of death, illness or divorce if one person proves unable or unwilling to contribute to the repayment of the joint loan, you will both be 100% liable for the full amount, and both will be expected to pay the outstanding amount.

Another potential disadvantage is that both parties will also remain responsible regardless of what the joint loan amount has contributed to or who owns the assets purchased with the loan. You should also consider that if either you or your loan partner possess a poor credit rating, then it can potentially affect other person’s credit file too once you both commit to a joint loan.

So if you are unsure whether you will benefit from the loan or whether you are able to commit to the repayments for the benefit of your partner, you may want to consider if it is the right borrowing option for you.

Is it better to get a joint loan?

As everybody’s financial situation is unique, deciding whether or not it is better to get a joint loan or a individual one will depend on your circumstance. Before agreeing to a joint loan, you should first ensure that both you and your partner are able to repay the whole loan amount to avoid further complications. Lenders will likely carry out an affordability check to work out if both you and your loan partner can afford the repayments of a joint loan.

It is also important to explore other borrowing options and personal loans too. These may prove more suitable for your situation if you prove eligible without a partner and are able to obtain the loan amount required. This can sometimes prove more suitable as you will be solely responsible for making the repayments rather than a shared responsibility.

A joint loan from Evolution Money

At Evolution Money, we’ve provided thousands of joint loans at a competitive rate and have a long history of satisfied customers. With joint loan amounts ranging from £5,000 to £50,000, we’re able to assist you in achieving financial goals whether you’re buying a new car, paying for a wedding or fitting a brand new kitchen. Our customers can also choose a

lending term to suit you, ranging from a year to 20 years.

If you’re interested in applying for a joint loan from Evolution Money, contact our qualified loan advisors on 0161 814 9158 to discuss your borrowing options and no-obligation quote or apply for a joint loan online.

Before submitting your Evolution Money joint loan application, please ensure you are eligible. To be a successful loan applicant, you must be aged 21 or over, own your home, live in the UK and prove that you are able to afford the loan repayments from your regular income.

n Money’s simple online application process

Warning: Late payment can cause you serious money problems. For help, go to moneyhelper.org.uk
Representative 28.96% APRC (Variable) - For a typical loan of £20,950 over 85 months with a variable interest rate of 23.00% per annum, your monthly repayments would be £537.44. Including a Product Fee of £2,095.00 (10% of the loan amount) and a Lending Fee of £714.00, the total amount repayable is £45,682.15. Annual Interest Rates ranging from 11.7% to 46.5% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.

Think carefully before securing debts against your home your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
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