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A wise guide to…

Taking out a joint loan with someone

A joint loan can be taken out by any two people, a couple, business partners, friends etc. They are commonly used by couples for larger purchases on cars, home improvements or family holidays. It’s a serious commitment as they link your financial profiles together in much the same way a mortgage or guarantor loan would. You can apply online today with Choose Wisely and see which UK direct lenders will accept your application.

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Representative 69.9% APR (variable). Representative Example: If you borrow £1,500.00 over 24 month at a Representative rate of 69.9% APR and an annual interest rate of 54.19% (fixed), you would pay 23 monthly repayments of £103.64 and a final payment of £103.74. The total charge for credit will be £987.46 and the total amount payable will be £2,487.46.
Choose Wisely is a trading style of Choose Wisely Limited and is a free to use price comparison website. Choose Wisely Limited is authorised and regulated by the Financial Conduct Authority as a credit broker not a lender, firm reference number 730574 and is registered with the Information Commissioner’s Office number Z3106681.

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Representative 69.9% APR (variable).

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If approved, the cash can be in your account in as little as 15 minutes.[†]

Table of contents

Written by Andrew Freelander
Read time: ~5 mins
Published: 2nd March 2020 Updated: 3rd March 2020

How do joint loans work?

A joint loan combines the annual incomes or monthly paychecks of two people looking to borrow money. Usually, the loan is made between a couple or business partners but this isn’t strictly the case. Any two people who fulfil the lender’s criteria can apply for a joint loan.

Combining your income is a great way to help get approved for a loan as it means you provide larger overall income, giving certain assurances to lenders and so making it easier to qualify for a larger loan.

There are many types of loans you can take out jointly. For example, you can apply for joint mortgage loans or a guarantor loan. Even setting up a joint bank account with an overdraft facility can be considered a joint loan.

With these things in mind, don’t be afraid to ask around and see what types of loans could suit you and your partner’s needs.

How do I apply for a joint loan?

When you bring your partner into the equation, the lender will consider all background information carefully about both you and your partner. The lender will determine the probability of you getting a joint loan based on several background checks.

Usually, important checks will be things like:

  • Personal income
  • Employment status
  • Credit history to date
  • Residential status
  • Minimum Age

Once your application has been approved for a joint loan, you and your partner will have your credit files linked. You can still apply for an individual loan, however, a credit search will show your partners credit history too and take this into account. This could be a good thing or a bad thing, depending on whether your partner's credit history is seen as positive or negative.

What are the advantages of taking out a joint loan?

You should think about a joint loan if you or your partner is struggling with multiple debts. For instance, if you or your partner have struggled to pay bills or make multiple loan repayments in the past, it might make sense to apply for joint loan debt consolidation. This is often cheaper and easier to manage than multiple loans, as it combines several loans and repayments into one bigger loan.

Furthermore, should you as an individual have bad credit with several banks rejecting your loan applications, the strike against your credit rating puts you further into a cycle of poor credit history that can seem never-ending, difficult to get out of and leaving you resentful.

That is why having a partner to share payment responsibilities can help ease financial pressures when used responsibly.

What are the drawbacks?

It is important not to underestimate that this is a joint couple loan and with it comes a shared payment responsibility.

For example, If the relationship between the two partners, or a married couple should end, the loan will still need to be paid off. Each person is responsible for the loan and to fulfil the requirements regardless of what happens personally.

By accepting a joint loan, you each agree to pay off the whole debt even if the other person does not.

The pro’s of a joint personal loan include securing a larger loan amount should you need it as well as sharing financial responsibility. But should you abuse this shared financial responsibility such as one of you not being able to keep up with repayments, you will still have to repay the full amount you have borrowed within the same repayment schedule.

Failure to make your loan repayments could incur charges as a result of you breaking your contract. There is always an element of risk involved with applying for a joint loan as a couple.

Unforeseen circumstances do occur, so it is important to clarify the position and duties of each individual to make repayments, their responsibilities and instructions in case of accidents, injuries or even death.

The cost of a joint loan should be considered closely - guarantor loans or payday loans are for example more expensive than a longer-term joint loan to buy a house. When you compare loans on Choose Wisely you will be able to see the total cost of the loan along with the APR.

Who does joint loans?

Should this all sound good to you, then you are going to want to begin looking.

Joint loans can be provided by several lenders across the UK. Many websites offer instant decisions, providing you with a wide range of borrowing options and flexible repayment schedules.

It is important to check the criteria for joint loans as they vary across different lenders. Though arguably, most high street banks provide similar rates, decisions are based upon your circumstances. Therefore, instead of always seeking the best joint loans, you should ask, “does this joint loan product suit our needs and current status?”

The best joint loan may not always be the one with the lowest rates. Consider whether you need a joint loan for bad credit, or indeed a loan for a married couple with the likelihood of a prospective family soon. Other factors such as repayment schedules become more important and so should be taken into consideration.

What banks do joint loans?

If you have bad credit a bank won’t always accept your loan application, but there are other lenders that will. Choose Wisely provides you with an overview here.

Banks such as Tesco Bank, Sainsburys Bank, TSB, Santander and HSBC UK all provide joint loan accounts with a relatively straightforward process. They often offer loan terms ranging from 1 year to 10 years, depending on the amount you ask to borrow and the current rates.

There are no set amounts as to how much you can borrow, but lenders typically offer anything between £1000 to £15,000 limits.

Always remember to be careful and vigilant when checking out lenders.

How to apply for joint loans

Remember, many sites claim to offer impartial advice, flexible repayment periods and guaranteed approval, but this is not always the case. Such attractive deals can sometimes come with nasty surprises such as steep interest rates or inadequate or poorly performed affordability checks. Therefore, it always pays to read the fine print.

Choose Wisely has over 340,000 product reviews directly onsite and over 170 Trustpilot reviews. We are committed to working with responsible and ethical providers of loans, credit cards and bank accounts.

As a result, we have removed many of these potential pitfalls for you. All the products featured on Choose Wisely are authorised by the Financial Conduct Authority (FCA).

Apply now, get a decision today.

  • Select your loan amount and repayment term using the options on this page
  • Click Get Accepted
  • Fill out the form. Your data is 100% secure. Takes 2 minutes to complete
  • Compare lenders that have accepted your application.
  • Finish your application with the best matched lender.

What are my alternatives to a joint loan?

Like most things, there are many different loans for different circumstances. Whether you’re looking to buy a new car, finance a wedding or a honeymoon, the list can be overwhelming. Choose Wisely has several loan options, see below for more information.

  1. Guarantor loans

  2. Unsecured personal loans

  3. Secured personal loans

Guarantor loans

Similar to a joint loan, the difference being there are dedicated guarantor lenders as opposed to banks. Where lenders need to manage risk, a guarantor will add additional security to an application by agreeing to pick up the costs if the borrower gets into arrears.

Unsecured personal loans

If you have good credit, then this is a good option. If you know you have bad credit, then this is not the best option for you as it is highly likely your application will be declined, further harming your credit file.

Secured personal loans

If you need to borrow a larger loan but have a fair to poor credit, you can secure your loan against an asset such as your car, your home or some other form of collateral - hence the term ‘secured’ loan.

Get the right guarantor loan

Do you need someone's help to apply for a loan but you don't want a joint loan? Get guarantor loan info before applying.

What can I use a joint loan for?

You can use joint personal loans for just about anything, within reason, once you have the money available in your banking facility. You don't have to pledge to use the loan for a specific purpose. Typically, where these types of loans are for larger amounts they're normally used for larger purchases or consolidating other debts. Lenders will not offer money to vulnerable consumers if they have reason to believe the money will be used for gambling for example.

How much can you borrow with a joint loan?

The amount you can borrow will always be down to the lender's discretion as they will assess what they feel will represent a necessary level of risk for each applicant when lending to someone in your personal circumstances. As long as you can afford the payments lenders will typically offer anything between £1,000 and £15,000.

Do I need to be married to get joint loans?

No. Marriage is not a condition that lenders look for in a joint loan application. Therefore you could be engaged or cohabiting with the person you're applying with. In fact they don't need to be a spouse or significant other at all. If a friend or business partner is willing to apply with you then this will also be considered by most lenders. Ultimately, lenders are most concerned about your ability in repaying the loan, so if you have a good, yet informal, relationship with another applicant whose willing to tie themselves with you financially then your application is likely to be considered.

Written by
Andrew Freelander
Brand & Content Manager at Choose Wisely

Andrew joined Choose Wisely 5 years ago, originally working in a design capacity to make sure the website was simple to use. Most notably he worked with the Consumer Finance Association to design the comparison table of choice for High-Cost Short Term Finance products.

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Important Information.

All of the information in this guide is correct at the time of writing.

Rates shown are quotes based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 3.9%APR to a maximum of 1575%APR Representative and loan repayment periods range from 3 to 60 months.

[*][†] Once accepted, your loan can be transferred to you in as little as 15 minutes. The time that it takes for the loan to show in your bank account will depend on your lender and your bank.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyadviceservice.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
Your score can be accessed for free via any of the main credit reference agencies such as Credit Karma, Clearscore or Experian.