Unveiling the Best Joint Loans of 2025
When it comes to joint loans, two heads are often better than one. Combining income and credit histories can provide access to better loan terms and higher borrowing amounts. Whether you're applying with a spouse, family member, or business partner, our comprehensive guide will help you navigate the world of joint loans and select the best option that suits your needs.
Anastasiia S
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Anastasiia S
Fact Checked
Update 29.01.2025

What is a Joint Loan?

A joint loan is a financial arrangement in which two or more individuals apply for a loan together and share equal responsibility for repaying the borrowed amount. The borrowers may be spouses, partners, family members, or even friends. By combining their income and creditworthiness, joint applicants can increase their chances of obtaining a larger loan or securing better terms, even if they have bad credit. In a joint loan, all borrowers are equally liable for making regular payments towards the loan, and any default or missed payment can affect the credit scores of all parties involved. Joint loans are often used for significant purchases such as a home or a car, enabling individuals to pool their resources and increase their borrowing power while spreading the financial burden.

Features

  • Multiple Borrowers. Joint loans involve two or more individuals applying for a loan together. The borrowers could be spouses, partners, family members, or friends.

  • Shared Responsibility. All borrowers share equal responsibility for repaying the loan. Each borrower is jointly liable for the entire loan amount. If one borrower fails to make payments, the others are obligated to cover the shortfall.

  • Combined Income and Creditworthiness. Joint loans allow applicants to combine their incomes and credit histories, potentially increasing their chances of qualifying for a larger loan amount or obtaining more favorable terms. Lenders assess the collective financial standing of all borrowers to determine loan eligibility.

  • Improved Borrowing Power. Joint loans can provide individuals with greater borrowing power than they might have on their own. Multiple borrowers' combined income and creditworthiness may result in higher loan amounts, lower interest rates, or longer repayment periods.

  • Credit Impact. Each borrower's credit profile is affected by the joint loan. If the loan is repaid responsibly and on time, it can positively impact the credit scores of all borrowers. Conversely, any defaults, missed payments, or delinquencies will negatively affect all parties' credit scores.

  • Shared Ownership or Purpose. Joint loans are often used for joint ownership purposes, such as buying a house or a car together. The loan funds are typically used for a specific purpose agreed upon by all borrowers.

  • Legal Agreements. Joint loans typically require a legal agreement, such as a co-borrower agreement or a joint loan agreement, outlining the responsibilities and obligations of each borrower. These agreements establish the terms and conditions of the loan, including repayment schedules and distribution of ownership if applicable.

Pros and Cons

Pros
  • Increased Loan Eligibility. Joint loans allow borrowers to combine their income and creditworthiness, increasing their chances of qualifying for larger loan amounts or more favorable loan terms.

  • Enhanced Borrowing Power. By pooling their resources, borrowers can access higher loan amounts, which can be beneficial for major purchases like a home or a car, even if they have poor credit.

  • Shared Responsibility. All borrowers share the responsibility of repaying the loan, distributing the financial burden among multiple individuals.

  • Potential for Better Interest Rates. Joint loans may attract lower interest rates compared to individual loans, as lenders consider the collective financial strength of all applicants.

  • Opportunity for Joint Ownership. Joint loans are often used for joint ownership purposes, allowing multiple individuals to share ownership of an asset such as a property or vehicle.

Cons
  • Joint Liability. Both the primary borrower and the co-borrower are equally responsible for repaying the loan, and any default or missed payment can negatively impact the credit scores of all parties involved.

  • Risk of Disagreements or Conflicts. Joint loans require open communication and trust among borrowers. Disagreements or conflicts regarding loan repayment or shared ownership can strain relationships.

  • Potential for Unequal Contributions. If one borrower contributes less to the loan or fails to meet their financial obligations, other borrowers may have to shoulder a disproportionate burden.

  • Limited Flexibility. Joint loans can limit individual financial independence, as major financial decisions related to the loan require mutual agreement among all borrowers.

  • Impact on Future Borrowing Ability. The joint loan may affect individual borrowing capacity in the future, as lenders can consider the debt obligation and shared liability during subsequent loan applications.

How to get a Joint Loan

  1. Identify Co-Borrowers. Choose individuals you trust and have close relationships with to become your co-borrowers. This can be a spouse, partner, family member, or friend.

  2. Determine Loan Purpose. Decide on the purpose of the loan, such as buying a home, financing a car, or funding a business venture. Make sure all co-borrowers are on the same page regarding the loan's intended use.

  3. Assess Financial Situation. Evaluate the financial stability and creditworthiness of all co-borrowers. Gather essential financial documents, including income statements, bank statements, and credit reports, to provide to potential lenders.

  4. Research Lenders. Look for joint personal loan lenders and compare their interest rates, loan terms, and eligibility requirements. Consider factors like reputation, customer reviews, and the lender's willingness to work with multiple borrowers.

  5. Submit Joint Loan Application. Complete the joint loan application process with the chosen lender. Provide accurate information for each co-borrower, including personal details, financial information, and employment history.

  6. Documentation and Agreements. Prepare any necessary documentation requested by the lender, such as proof of income, identification, or co-borrower agreements. Read and understand all terms and conditions before signing any loan agreement.

  7. Loan Approval and Fund Disbursement. Wait for the lender's decision on the loan application. If approved, coordinate with the lender to finalize the loan agreement and arrange to disburse the funds.

  8. Loan Repayment Plan. Create a repayment plan that suits the financial capabilities of all co-borrowers. Clearly define each borrower's responsibility for making regular payments and ensure everyone knows the due dates.

  9. Maintain Communication and Accountability. Establish open and transparent communication among all co-borrowers to ensure smooth loan repayment. Regularly update each other on payment statuses, potential financial changes, or any issues that may arise.

  10. Responsible Loan Management. Manage the joint loan responsibly by making timely payments and keeping track of the loan balance. Regularly monitor credit reports to ensure accuracy and address any discrepancies promptly.

Best places to borrow a loan with bad credit

Upgrade

Upgrade is a prominent online lender that offers personal loans to borrowers with bad credit. They provide loan amounts ranging from $1,000 to $50,000, making them suitable for various financial needs. The minimum credit score required by Upgrade is relatively low, typically around 580. This makes it accessible to individuals with a less-than-stellar credit history. One notable advantage of Upgrade is its flexible repayment terms, which can extend up to five years. This longer repayment period allows borrowers to manage their monthly payments more effectively. However, it's worth noting that Upgrade charges origination fees ranging from 2.9% to 8%. Additionally, while they do not have any prepayment penalties, borrowers should be aware of the interest rates, which can be relatively high for individuals with bad credit.

Upgrade review

Upstart

Upstart is another online lender that specializes in providing loans to borrowers with bad credit. Their loan amounts range from $1,000 to $50,000, allowing borrowers to access the funds they need for various purposes. Upstart utilizes a unique underwriting model that takes into account factors beyond just credit scores, making it more inclusive for individuals with limited credit history or low credit scores. The minimum credit score required by Upstart is typically around 580. One of the significant advantages of Upstart is its soft credit check, which means that applying for a loan does not negatively impact your credit score. Repayment terms offered by Upstart range from three to five years, providing borrowers with flexibility. While they do charge origination fees of up to 8%, it's important to note that they don't impose any prepayment penalties. However, borrowers with bad credit should expect higher interest rates.

Upstart review

LendingPoint

LendingPoint is a bad credit lender that offers personal loans ranging from $2,000 to $36,500. They consider borrowers with credit scores as low as 585, making them accessible to individuals with bad credit. LendingPoint prides itself on providing fast funding, often disbursing funds within one business day. Their repayment terms typically range from two to four years, allowing borrowers to tailor their loan duration according to their needs. It's important to note that LendingPoint does charge origination fees that can be up to 6%. They also have a slightly higher interest rate compared to traditional lenders, which is to be expected when borrowing with bad credit. However, they do not impose any prepayment penalties, enabling borrowers to pay off their loans early if they desire.

Lendingpoint review

Universal Credit

Universal Credit is an online lender that specializes in bad credit loans, offering loan amounts ranging from $500 to $15,000. Their minimum credit score requirement is relatively low, typically around 550, making them accessible to borrowers with poor credit. Universal Credit offers repayment terms ranging from six months to five years, allowing borrowers to choose a duration that aligns with their financial situation. While they charge origination fees, the amount may vary based on the borrower's creditworthiness. One notable advantage of Universal Credit is its willingness to consider applicants who have previously filed for bankruptcy. However, borrowers should be aware that the interest rates associated with bad credit loans from Universal Credit may be higher compared to traditional lenders.

Universal Credit review

OneMain Financial

OneMain Financial is a well-established lender that specializes in bad credit loans. They offer loan amounts ranging from $1,500 to $20,000, making them suitable for various financial needs. OneMain Financial requires a minimum credit score of 600, slightly higher than some of the other lenders in this category. However, they have a reputation for considering other factors beyond credit scores when evaluating loan applications. OneMain Financial provides repayment terms that range from two to five years, allowing borrowers to select a term that fits their budget. It's important to note that OneMain Financial charges origination fees, which can vary depending on your residence state. While they do not disclose their interest rates upfront, borrowers with bad credit should expect higher rates.

Onemain Financial Review

Avant

Avant is an online lender that specializes in offering personal loans to individuals with bad credit. They provide loan amounts ranging from $2,000 to $35,000, catering to various financial needs. Avant has a minimum credit score requirement of 580, making them accessible to borrowers with less-than-ideal credit histories. Repayment terms offered by Avant typically range from two to five years, giving borrowers flexibility in managing their monthly payments. While Avant charges origination fees up to 4.75%, they do not impose any prepayment penalties. It's important to note that Avant's interest rates can be relatively high for borrowers with bad credit. However, they provide a transparent prequalification process that allows borrowers to check their potential loan offers without affecting their credit scores.

Avant

Requirements and Conditions

  • Co-Borrowers. Joint personal loans require two or more individuals to apply as co-borrowers. Lenders may require a certain relationship between the co-borrowers, such as spouses, domestic partners, family members, or business partners.
  • Creditworthiness. The lender will assess each co-borrowers credit history and credit scores. Generally, all co-borrowers should meet the minimum credit score requirement to qualify for a joint loan.
  • Income Verification. Lenders typically require documentation to verify the income of all co-borrowers. This can include recent pay stubs, tax returns, bank statements, or other relevant financial documents.
  • Debt-to-Income Ratios. Lenders may consider the combined debt-to-income ratio of all co-borrowers to determine loan eligibility. This ratio compares the total monthly debt payments to the total monthly income of the co-borrowers.
  • Down Payment or Collateral. Some joint loans, such as mortgages or auto loans, may require a down payment or collateral. The specific amount or value will depend on the loan amount, loan-to-value ratio, and the lender's requirements.
  • Joint Loan Agreement. A joint loan agreement is a legal document that outlines the responsibilities and obligations of each co-borrower. It establishes the terms and conditions of the loan, including repayment schedules, interest rates, and any specific provisions agreed upon by the co-borrowers.
  • Joint Liability. All co-borrowers are jointly and severally liable for the repayment of the loan. This means that if one co-borrower defaults or fails to make payments, the other co-borrowers are responsible for covering the payments in full.
  • Credit Impact. The joint loan will appear on the credit reports of all co-borrowers. Timely repayments will positively impact all co-borrowers' credit scores, while late payments or defaults will negatively affect everyone's creditworthiness.
  • Consent and Communication. Co-borrowers must consent to the joint loan and maintain open communication throughout the loan term. It is important to establish clear channels of communication to discuss loan-related matters and address any issues that may arise.

Ways to Receive the Money

  • Direct Deposit to Bank Account. The most common method is to deposit the loan funds directly into a designated bank account. This allows all co-borrowers to access and use the money as needed conveniently.

  • Check Issuance. Some lenders may issue a physical check for the loan amount. The check can be deposited into a joint bank account or individually endorsed by each co-borrower and deposited into their respective accounts.

  • Wire Transfer. In certain cases, the lender may offer the option of a wire transfer to transfer the loan funds directly to a designated bank account. This method provides quick access to the funds.

  • Prepaid Debit Card. In some instances, the lender may provide a prepaid debit card loaded with the loan amount. This card can be used for purchases or cash withdrawals, similar to a regular debit card.

Things to Pay Attention to

  • Clear Communication. Establish open and honest communication among all co-borrowers from the beginning. Discuss expectations, responsibilities, and financial commitments to avoid misunderstandings or conflicts later on.

  • Financial Stability. Evaluate the financial stability of all co-borrowers. Assess their income, credit history, and debt obligations to ensure that each individual can comfortably contribute to the loan repayment.

  • Loan Terms and Conditions. Carefully review the loan terms and conditions, including interest rates, repayment periods, fees, and any potential penalties. Understand all aspects of the loan agreement before signing it to avoid surprises in the future.

  • Loan Amount and Budgeting. Determine the appropriate loan amount based on your needs and repayment capabilities. Create a realistic budget that accommodates the loan repayment, considering other financial obligations and potential changes in circumstances.

  • Equal Liability. Understand that all co-borrowers are equally responsible for the loan. The joint loan will impact each individual's credit score, and any missed payments or defaults can negatively affect everyone's creditworthiness.

  • Repayment Plan. Develop a clear and agreed-upon repayment plan among all co-borrowers. Define how payments will be made, who will be responsible for making them, and ensure that all parties contribute their fair share to avoid financial strain or disputes.

  • Emergency Planning. Discuss and plan for unexpected circumstances, such as job loss or health issues that may impact the ability to make loan payments. Explore options like loan deferment or insurance coverage to safeguard against unforeseen events.

  • Legal Agreements. Consider consulting with an attorney or financial advisor to draft a formal co-borrower agreement that outlines each party's rights, responsibilities, and potential exit strategies. This document can provide clarity and protection for all co-borrowers.

  • Credit Monitoring. Regularly monitor credit reports and accounts to ensure accurate reporting and timely identification of any issues. Address any discrepancies or concerns promptly to safeguard your credit standing.

  • Future Loan Applications. Understand that the joint loan will impact the future borrowing capacity of all co-borrowers. Consider the potential implications of the joint loan on individual creditworthiness and future loan eligibility.

How to Repay a Joint Loan

  1. Understand the Loan Terms. Familiarize yourself with the loan terms and repayment schedule outlined in the loan agreement. Take note of the monthly payment amount, due date, and any additional fees or charges.

  2. Establish a Repayment Plan. Work together with all co-borrowers to develop a clear repayment plan. For example, they could choose convenient monthly payments or another frequency fit for both of them. Determine how you will split the monthly payment amount and allocate responsibilities for making the payments on time.

  3. Set Up Automatic Payments. Consider setting up automatic payments for the joint loan. This can help ensure that the payments are made consistently and avoid any potential late fees or missed payments.

  4. Coordinate Communication. Maintain open communication among all co-borrowers to stay informed about the loan's progress. Discuss any changes in financial circumstances, potential challenges, or upcoming payments.

  5. Prioritize Timely Payments. Make it a priority to submit the loan payment on or before the due date. Late payments can result in additional fees, negatively impact credit scores, and strain co-borrower relationships.

  6. Share Payment Responsibilities. Decide how the loan payments will be divided among co-borrowers. This can be an equal split or based on each individual's financial capability. Ensure that all co-borrowers contribute their fair share.

  7. Keep Track of Payments. Maintain a record of loan payments made by each co-borrower. This will help track the loan's progress and ensure all obligations are met.

  8. Monitor Credit Reports. Regularly monitor credit reports to ensure that the loan payments are being reported accurately. Address any discrepancies promptly to maintain the integrity of your credit profiles.

  9. Consider Lump Sum Payments. If possible, consider making lump sum payments towards the loan. This can help reduce the overall interest paid and shorten the repayment period.

  10. Seek Assistance if Needed. If you encounter financial difficulties or foresee challenges in meeting the loan payments, communicate with the lender promptly. They may be able to provide options such as loan restructuring or deferment.

Alternatives

  • Individual Loans. Instead of applying for a joint loan, individuals can consider applying for loans in their own names. This allows each person to be solely responsible for the loan and maintain individual credit profiles.

  • Secured Loans. Secured loans are backed by collateral, such as a home or a vehicle. By providing collateral, individuals may have access to lower interest rates or higher loan amounts, even without a co-borrower.

  • Credit Cards. Credit cards can be used to finance purchases or cover expenses. Individuals can apply for credit cards and manage their credit limits and repayments.

  • Personal Lines of Credit. Personal lines of credit offer flexibility, allowing individuals to borrow funds up to a predetermined credit limit as needed. Each person can manage their own line of credit separately.

  • Co-Signer Loans. If an individual doesn't qualify for a loan on their own, they can consider having a co-signer with a strong credit history. The co-signer agrees to take on responsibility for the loan if the primary borrower fails to make payments.

  • Peer-to-Peer Lending. Peer-to-peer lending platforms connect borrowers with individual lenders. Individuals can apply for loans from multiple lenders and negotiate terms that meet their requirements.

  • Home Equity Loans or HELOCs. Homeowners can tap into the equity in their property by applying for a home equity loan or a home equity line of credit (HELOC). These options allow individuals to borrow against the value of their home.

Editorial Opinion

While offering potential benefits, joint loans can be a double-edged sword that requires careful consideration. On the one hand, they provide an opportunity to combine incomes and creditworthiness, increasing loan eligibility and potentially securing better terms. The ability to share financial responsibilities can alleviate the burden on an individual borrower and open doors to significant purchases like a home or a car. Moreover, joint loans often serve as a catalyst for shared ownership ventures, allowing multiple individuals to invest in and benefit from valuable assets.

However, the allure of joint loans should not overshadow the potential risks they entail. Shared liability means that any misstep or default can harm all co-borrowers' credit scores, impacting their financial futures. Disagreements and conflicts regarding loan repayment or shared ownership can strain relationships, putting trust and open communication to the test. Additionally, the loss of individual financial independence and the need for mutual agreement on major financial decisions may restrict personal autonomy.

To navigate the complexities of joint loans successfully, it is crucial to approach them with transparency, trust, and thorough planning. Establishing a well-defined repayment plan, maintaining open communication among co-borrowers, and continuously monitoring credit reports are essential steps to safeguarding everyone's interests. Additionally, seeking legal advice and financial guidance can help mitigate potential risks and protect all parties involved throughout the loan journey.

In conclusion, joint loans have the potential to unlock opportunities and facilitate shared financial ventures, but they should not be entered into lightly. Thoroughly understanding the obligations, risks, and benefits involved is paramount. With careful consideration, responsible financial management, and a strong foundation of trust, joint loans can be a valuable tool for achieving shared goals while preserving personal and financial well-being.

Important

Keeping your Debt-to-Income (DTI) ratio below 30-40% of your monthly income is crucial. This will help you avoid potential financial problems in the future. Additionally, always assess the necessity and feasibility of taking a loan, ensuring you can comfortably manage its repayment.

How to Choose a Lender

  1. Make sure to confirm whether the lender is licensed to operate in your state. You can verify this information with your state regulator or attorney general.

  2. Check if the lender is a member of a reputable association, such as the Community Financial Services Association of America. Membership in such organizations may provide an extra level of reliability.

  3. Carefully review all the terms and conditions of your payday loan contract.

  4. Thoroughly examine the interest rates on payday loans and ensure that your contract includes a detailed breakdown of the total cost of the loan.

  5. Take advantage of your right of rescission. Usually, you can rescind the loan within three days after signing the agreement. Alternatively, there is typically a "cooling-off" period, which allows you several days to thoroughly review the contract before making an informed decision to enter into a consumer loan agreement based on the terms specified by the lender.

  6. Choosing a payday lender is a significant decision that demands careful consideration and a good understanding of how such organizations operate.

Additional Resources

Sources

FAQ

Is a joint loan easier to get?

How does a joint loan affect credit?

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08.06.2023
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Update 29.01.2025

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