Borrower – How To Loan Together With Others
January 1, 2020
Borrower and consumer loan
You may not always be able to take out a consumer loan without collateral. Today’s income and a credit check of the last three years’ income are used, and if you do not have sufficient ability to pay, you will not be granted a loan alone.
In such cases, the solution may be to ask a co-borrower. For example, one of your parents may be a co-applicant if you are a recent graduate and therefore unable to show income for the past three years, or you can apply for a loan with a good friend for a period of time where you do not have the liquidity to apply for loans alone.
The person you take out a loan with is then listed as a co-borrower and is jointly responsible for the loan. That means the debt is shared equally between both and that you both have the same legal responsibility when it comes to repaying the loan on time.
Parents as co-borrower
Before you have had your first full-time job, it can be challenging to get a consumer loan on your own. A credit check will be done by you when you apply for a loan, and then it is crucial that you have earned income over the last three years. Still, you may be in a situation where you need to take out an unsecured loan.
If one of your parents has good liquidity and is willing to pose as a co-applicant, this could be a solution. You enter into an agreement in advance on how you expect the loan to be repaid, but do not take out a loan that is higher than you can manage to pay it back over a given repayment period.
Boyfriend or spouse as co-borrower
Maybe you and your boyfriend or spouse want to take out a loan to renovate the bathroom or buy a car? Then a consumer loan can be a solution. If you take out the loan together, you are both responsible, which can be neat when you also need to spend the money together. Plan how you want to repay the loan, and loan no more than you can repay.
Good friends as co-borrower
Maybe you have such good friends that you trust each other and have enough confidence that you help each other when one of you faces financial challenges? With a thoughtful and tidy agreement at the bottom, a good friend can pose as a co-borrower and allow you to take out the consumer loan you or you need. But make sure that every aspect of the loan is talked through so you don’t sacrifice the friendship if you get into a situation where the loan is in default.
Responsibility of the borrower
When you apply for a loan with a co-borrower, their total income and creditworthiness are considered when the loan is to be granted. This means that you will most often have the opportunity to get better terms on your loan or have the opportunity to borrow a higher amount than if you applied for the loan alone. At the same time, it is important that the co-borrower is aware that he or she will be responsible with you if the installment amounts are not repaid. As important as if you had taken out the loan alone, it is therefore that you follow the repayment schedule and pay on time.
It is also important to have a clear agreement and great trust between you and the person you are applying for a loan with. Set up an overview of your overall finances, create a budget and agree on how long-term repayment plan you want.
How to take out a loan together
Borrowing a loan with someone else is no more complicated than applying for a loan alone. When you submit a loan application with Cathbad you will be asked if you want to apply with a co-borrower. If you check this box you can enter birth and social security numbers and income information for both of you. Both applicants will be credit checked after the application is submitted.
Apply for a consumer loan here!