Applying for a joint loan? A joint loan is a loan that involves more than one applicant. This could involve partners, spouses, family members, business partners or friends. The loan can be either secured or unsecured in nature.
Advantages of Applying For a Joint Loan
There are many advantages for both the lender and the borrower when applying for a joint loan. For the lender there is less of a risk for them retrieving the money as if one applicant fails to repay the money, then there are other borrowers names against the loan that can take on the responsibility.
For the borrower the advantages of applying for a joint loan is that because lenders take in to account joint incomes and joint credit ratings, then the chances of being accepted are higher than that of a sole loan application. Also, it provides applicants an opportunity to borrow more cash with a higher loan value if needed.
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When applying for joint loans all applicant’s information will be checked. This will be based on personal income, employment status, credit history and residential status. Joint loans are typically taken out against secured loans, unsecured loans and joint bank accounts with an overdraft facility.
Joint secured loans can be used to buy a home or you can also take out a loan against a home that you jointly own. An unsecured loan is not secured on any property or any possessions.
When being accepted for a loan, the applicants can use the cash for whatever they feel is necessary with no restrictions from the loans company. You do not have to state the reason for the loan on the application form either.
Applying for joint loans with bad credit
A joint loan is a great idea if you have bad credit or are on a low income.
Due to the fact that a joint loan takes into account the combined income of all the applicants and the combined credit rating, the combination will help give applicants a better chance of being accepted than if they were to apply separately.
All these factors have an effect on the rate of loan that you will be accepted for. By applying for a joint loan it may be your best option if you have bad credit or are on a low income.
With such advantages that have been mentioned above and the ease and comfort of paying the loan back with more than one person it can be a great and the best choice for most people.
Using a joint loan in this way is a bit like a guarantor loan, as there is always another party or parties to “take up the slack” if something should go financially wrong in the future when repaying the loan.
However, joint loan interest rates should be much less than guarantor loans, so there are advantages all round in using this type of shared loan responsibility.