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How to Get a Joint Personal Loan

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Adding a co-borrower to your personal loan application can make it easier to qualify for a loan: You’ll be presenting a lender with a greater combined income, more assets and a potentially stronger credit profile. When you take out a joint loan, both you and your co-borrower are equally responsible for paying back the funds.

While you can use a personal loan to pay for almost anything, it’s important to understand what repayment entails before you borrow. Ahead of taking out a joint personal loan, make sure you understand who’s responsible for what and how a co-applicant is different from a loan cosigner.

What is a joint loan?

A joint loan is when you and another borrower assume equal responsibility in repaying a loan. Each of you will have your creditworthiness assessed and sign the same loan documents. Because you’ll each have equal responsibility for the loan, you’ll typically share whatever the loan was used to purchase.

If you’re applying jointly for a mortgage, this could help you get approved for a larger mortgage. It would also mean that both you and the other borrower would have an equal stake in the property.

In the case of a personal loan, if you have a weak credit score, a lender may be more willing to approve you for a personal loan if your co-applicant has a strong credit history. In the same way, your joint application with two incomes can make a lender more likely to give you a bigger loan.

WHAT CAN GO WRONG WITH A JOINT LOAN?

As with any partnership — business or personal — a co-applicant relationship can sour over time, or even come to an end. If that happens, you’ll need to determine how best to split the debt over the remaining repayment term.

A joint personal loan can also get complicated when it comes to credit. One borrower’s bad credit might mean higher interest rates for both of you, and it’s possible a lender might deny you a joint loan because of your co-applicant’s poor credit standing. Falling behind on payments — or defaulting — might cause both your credit scores to take a hit.

On the other hand, adding a co-borrower with strong credit can help your chances of getting a loan if you can’t qualify on your own. If both of your credit profiles are strong, applying together could result in even better terms and higher borrowing amounts than either of you could get on your own.

Here’s a look at both the pros and cons of this type of borrowing relationship:

Joint personal loans: The pros and cons
Pros Cons
  • Present lenders with a higher qualifying combined income
  • Offset a second borrower’s weaker history
  • Allow borrowers to come up with a larger down payment
  • Could sour the relationship between co-applicants
  • Might make loan approval less likely if one borrower has poor credit
  • Lead to a credit score drop for both borrowers if loan payments are late, or if the loan defaults

IS A CO-APPLICANT THE SAME AS A JOINT BORROWER?

Yes. A co-applicant, or joint borrower, is anyone who applies for a joint loan along with the primary applicant. Each party then bears equal responsibility in repaying the loan.

IS A JOINT LOAN A COSIGNED LOAN?

No. A cosigner on a loan is different from a co-applicant. A loan cosigner takes on responsibility for the loan without any ownership claim on whatever is purchased. If you have poor credit, a cosigner with excellent credit might help you qualify for a loan you might not otherwise receive. On the downside, a cosigner is also responsible for making sure the loan gets repaid, so if you default, your cosigner’s finances or credit will also take a hit.

Where do you find a joint personal loan?

3 joint personal loans
APR Terms Borrowing amounts Credit history

LendingClub
8.30%–36.00% 36 to 60 months $1,000 to $40,000 May be a good choice for strong-credit borrowers

LightStream
6.99%–22.49% 24 to 144 months $5,000 to $100,000 Might be best for borrowers with good-to- excellent credit
OneMain Financial 18.00%–35.99% 24 to 60 months $1,500 to $20,000 Potential option for borrowers with poor-to-fair credit

LendingClub

LendingClub is a peer-to-peer lending company: This means that unlike a bank, credit union or online financial institution, your joint personal loan will instead be financed by another person or an institutional investor. In comparison to the other two lenders in the chart, LendingClub offers a broad range of annual percentage rates (APRs). (An APR is a more accurate measure of your loan costs, as compared to a loan’s interest rate.)

If you’re approved for a loan and it’s funded, you could receive funds within 48 hours.

 

LightStream

LightStream is an online division of Truist Bank (formerly SunTrust Bank). It offers home loans, auto loans and personal loans for a range of needs. It also offers a broad range of repayment terms on a personal loan (24 to 144 months), plus same-day funding after loan approval.

LightStream offers lower rates than both OneMain Financial and LendingClub, but you’ll need good-to-excellent credit to qualify. In addition, the company’s Rate Beat program offers rates that are 0.10 percentage points lower than those offered by competing lenders, provided borrowers have already been approved for those loans.

LightStream logo

OneMain Financial

OneMain Financial offers personal and joint loans in smaller amounts than both LightStream and LendingClub, as well as generally shorter loan times, too. OneMain Financial also offers the possibility of same-day funding.

When you apply for a OneMain financial personal loan online, the application lets you specify you’re applying with a co-applicant. You and your prospective joint borrower can start your application for a loan online before finishing your application with a loan specialist online, over the phone or at a local branch.

 

How do you apply for a joint personal loan?

  • Check your rate: Go to your lender’s website to confirm that they allow co-applicants and, if possible, determine the rate the both of you might receive based on your credit scores and joint personal information.
  • Fill out the joint loan application: Check the “joint” or “co-application” box so you and your co-applicant can both provide any information required.
  • Review your offers: If you receive multiple loan offers, you and your co-borrower should review each one carefully and agree to the terms that best suit your needs. In particular, for a loan with OneMain Financial, you’ll chat online, meet in-person or talk over the phone with a loan specialist to discuss options, verify documents and provide proof of any needed collateral. Once you’re approved for a loan, your lender will do a hard credit inquiry, which will cause your credit score to temporarily dip.
  • Accept a joint loan agreement: Once you’ve accepted a joint personal loan, you and your co-borrower will sign your loan agreement together. At this time, you’ll also need to set up your loan for funding, by deciding the bank account you’ll use for regular monthly payments. If you’re not worried about overdrawing on your account, it could make sense to set up automatic payments so you never miss a bill.
 

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