What Is a Joint Loan?
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How does a joint loan work?
| Co-borrower | Co-signer | |
|---|---|---|
| Responsible for paying back the loan? | Yes, each co-borrower is equally responsible for repayment. | Only if the primary borrower defaults. |
| Access to loan funds? | Yes. | No. |
| Do payments impact credit score? | Yes. | Yes. |
Qualifying for a joint personal loan
- Check eligibility requirements. Pay close attention to the lender’s credit score and debt-to-income ratio requirements. Lenders consider the income and credit histories of both you and your co-borrower. For example, LendingClub requires each borrower to have at least a 600 credit score and a DTI below 40%.
- Pre-qualify with multiple lenders. You and your co-borrower can pre-qualify — check your estimated rate before committing to a loan — with many online lenders, banks and credit unions. Pre-qualifying does not affect your credit score.
- Compare lenders. Assess the annual percentage rate (APRs), repayment terms and potential fees, including origination and late fees, associated with each joint loan offer.
- Apply for the loan. Once you select the best offer, you and your co-borrower will fill out and submit the loan application. Lenders may ask for documentation to verify personal and financial information. Upon approval, you'll both sign the loan agreement.
Lenders that offer joint loans
| Lender | Minimum credit score | APR | Loan amount |
|---|---|---|---|
| | 600 | 7.90% - 35.99% . | $1,000 - $40,000. |
| | None. | 7.99% - 35.99% . | $1,000 - $50,000. |
| | None. | 18.00% - 35.99% . | $1,500 - $20,000. |
| | 660 . | 8.99% - 35.99% . | $2,000 - $50,000. |
| | None. | 8.99% - 35.49% . | $5,000 - $100,000. |
How do joint loans affect your credit score?
Pros and cons of joint loans
Pros
- Increase your chance of qualifying. Borrowers with high debt-to-income ratios or low credit scores may improve their chances of qualifying by applying with a co-borrower with higher income and stronger credit.
- Potential for better loan terms. You may also qualify for a higher loan amount and lower rate.
- Share the cost of repaying. You don’t have to shoulder the cost of a personal loan alone since the co-borrower is equally responsible for repayment.
Cons
- You could be on the hook for the entire loan. If the co-borrower fails to pay their share, then you’re responsible for the entire loan.
- Your credit depends on your co-borrower’s diligence. Because you both equally own the loan, if either of you misses a payment, the other person’s credit can take a hit.
- Could lead to a damaged relationship. If either person fails to pay and negatively impacts the other, it could lead to a strained relationship.
When to consider a joint personal loan
- You cannot qualify for a loan by yourself because your income or credit score is too low to meet lenders’ requirements.
- Adding a co-borrower allows you to get a lower rate or larger loan.
- You’re using the loan to consolidate debt you’re jointly responsible for, or for a shared expense (like a renovation project for a home you both own).
Joint personal loan alternatives
- Co-signed personal loan: When you take out a personal loan with a co-signer, you’re responsible for payments and you have exclusive access to loan funds, but your co-signer agrees to be responsible if you don’t make payments. A co-signer with good credit can help you qualify for a loan with better terms, but you’ll hurt their credit if you miss payments.
- Secured personal loan: Taking out a secured loan, which is backed by collateral, may be an option if you can’t qualify for a traditional personal loan. However, your lender can seize your collateral if you don’t make payments, so you’re putting your property at risk.
- Personal loan for bad credit: It’s possible to get a personal loan with bad credit even if you don’t have a co-borrower or co-signer, but you’ll pay higher interest rates. Traditional banks often require at least good credit to take out a personal loan, but some credit unions and online lenders have more flexible standards.
- 0% APR credit card: If you have a good credit score (typically 690 or higher), you may qualify for a temporary 0% APR on balance transfers, new purchases, or both. Some banks and credit unions offer joint credit cards, where both users share usage of the card and are jointly liable for payments.
Is a joint loan the same as a co-signed loan?
Joint loans are different from co-signed loans. A co-borrower on a joint loan shares ownership of the loan and responsibility for repayment. A co-signer is liable only if you fail to repay the loan.
Am I more likely to be accepted for a joint loan?
A borrower with bad credit or a high debt-to-income ratio can improve their chance of qualifying for a personal loan if their co-borrower has good credit or a lower debt-to-income ratio. However, including a co-borrower on a loan application is not a guarantee that you’ll qualify for a joint loan.
Can an unmarried couple get a personal loan together?
You typically don’t have to be married to someone to get a joint loan with them, however some lenders may ask that co-borrowers be related, married or share the same household. Be sure your co-borrower is someone you trust, because both of you will have access to the loan and be responsible for payments.
Article sources
- 1. National Bureau of Economic Research. Prodigals and Projecture: An Economic History of Usury Laws in the United States from Colonial Times to 1900. Accessed May 2, 2025.
- 2. Federal Register. Federal Interest Rate Authority: A Rule by the Federal Deposit Insurance Corporation on 07/22/2020. Accessed May 2, 2025.
- 3. Federal Reserve Bank of St. Louis. Finance Rate on Personal Loans at Commercial Banks, 24 Month Loan. Accessed May 23, 2025.
- 4. Consumer Financial Protection Bureau. Truth in Lending Act (TILA) examination procedures. Accessed May 2, 2025.
- 5. Experian and Oliver Wyman. Financial Inclusion and Access to Credit. Accessed Jan 23, 2025.
- 6. Center for Responsible Lending. Payday and Other Small Dollar Loans. Accessed May 2, 2025.
- 7. National Credit Union Administration. Credit Union and Bank Rates 2024 Q4. Accessed May 23, 2025.
- 8. Federal Reserve. Military Lending Act. Accessed May 2, 2025.
- 9. Consumer Financial Protection Bureau. What is a payday loan?. Accessed May 2, 2025.
- 10. Center for Responsible Lending. Unsafe Harbor: The Persistent Harms of High-Cost Installment Loans. Accessed May 2, 2025.
- 11. Consumer Financial Protection Bureau. What are the costs and fees for a payday loan?. Accessed Jun 6, 2025.
- 12. Center for Responsible Lending. Unsafe Harbor: The Persistent Harms of High-Cost Lending. Accessed Jun 6, 2025.
- 13. Consumer Financial Protection Bureau. Consumer Use of Buy Now, Pay Later and Other Unsecured Debt. Accessed Jan 27, 2025.
- 14. Internal Revenue Service. Retirement Topics - Plan Loans. Accessed Apr 8, 2025.
- 15. Internal Revenue Service. Retirement topics: Exceptions to tax on early distributions. Accessed Apr 8, 2025.
- 16. Administrative Office of the U.S. Courts. Bankruptcy Basics. Accessed Apr 8, 2025.
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