Credit for two people – advantages and disadvantages
A loan for two people is offered by numerous banks, credit institutions or other lenders, for example on the Internet. This involves both rights and obligations for both applicants as well as advantages and disadvantages that need to be considered.
A loan for two people or a partner loan
A loan with two applicants is usually applied for or taken out for two reasons. On the one hand, the focus is on joint purchases such as real estate or new furnishings for the apartment, as well as other investments. Another reason, especially for the banks or lenders, is a co-applicant basic as loan security.
If the applicant has only a limited credit rating or only has a temporary employment contract, a loan is often only granted if a second solvent person assumes liability for the repayment or default. Liability is not normally shared, but is transferred in full to both borrowers. In many banks, a loan for two people also requires common living and household management, although the couple does not have to be married.
Advantages and disadvantages
People who intend to take out a loan with two people, especially a larger sum, should be aware of the advantages and the risks. The more creditworthy a borrower is, the lower the risk for the lender. In the case of a partner loan or a loan including a co-applicant, the double security has a positive effect on the granting of the loan, the amount of the interest rate, the amount of the loan and other conditions. The more risk a bank has to take, the higher it will pay for it.
A co-applicant can act as a kind of guarantor so that the other borrower can get the loan he needs or as an equal partner who is also entitled to the loan amount. For example, if a property or property is to be bought from the loan, both borrowers should also be entered in the land register. However, a loan for two people should be reconsidered by those involved, there is a doubt in the trust in the respective partner. The term of a joint loan can take longer than the partnership. If there is a high probability that one of the applicants will lose his job and may be unemployed for a long time, the creditworthy co-applicant must count on the full repayment.
When it makes sense:
If there is mutual trust, taking out a loan for two people can be useful if, for example, a joint purchase is planned that has a countervalue (e.g. real estate). In the event of separation, it can be sold and the loan can be redeemed. Furthermore, if only one loan helps in the respective situation and the amount as low as possible, the term as short as possible and the conditions are more favorable than with other loan offers. One of the partners should be able to handle the repayment alone without problems in an emergency. Rights and obligations are borne by both people.