A joint loan can help pay for large purchases, such as a new car, or cover the costs of home improvements. Together, you may be able to borrow more money than you could by yourself. But taking out a joint loan requires careful thought – you’ll be responsible for paying it back in full, not just your half.
Different types of loans and debt can be taken out jointly. These include secured loans, such as a mortgage, and unsecured loans, such as a personal loan, wedding loan or debt consolidation loan. You can also open a joint bank account with an arranged overdraft.
Credit cards can’t be taken out jointly. There is a main cardholder who is responsible for paying off the credit card. You can add an additional cardholder to use the credit, but they won’t be legally responsible for making payments.
Explore: Secured vs unsecured loans explained
Here are some of the key things to consider before taking out a joint loan:
It’s important you can afford to repay the loan each month, even if your financial situation were to change – so factor this into your budget.
Missed loan repayments can affect your credit score, and your ability to borrow in the future. Your home could also be repossessed if you’re unable to meet your mortgage repayments.
You’ll be responsible for paying back the total amount of the loan, not just your half. So if one partner decides not to pay, or can’t pay, the other will need to ensure the repayments are still met. Even if your partner spent the money, or owns the item(s) purchased using the loan, you’re both still responsible.
A relationship breakdown can be difficult and may affect your finances. Repayments on any joint loans, including mortgages, still need to be made after a separation, but it’s worth letting your bank know if you’ve separated.
When you have a joint loan, or joint debt with someone, your credit history will be linked to theirs. This means if you decide to borrow money in the future, in your own name, the lender can take into account the other person’s credit history as well as your own.
It’s a good idea to check your credit report before you apply, and ask your partner to do the same.
Before taking out a joint loan, make sure you're both aware of the terms and conditions of the loan, including any fees and charges.
Before you submit your application, make sure that all your information is completely accurate, including the details in your credit report. And make sure you only apply if you feel comfortable taking out a joint loan with the other person.
The easiest way for you to submit a joint loan application with us is to visit your local branch. There, one of our branch staff will be able to run through your application with you.
Alternatively, you can call us to apply through telephone banking.