Joint personal loans: everything you need to know

Applying for a loan with a partner can sometimes make it easier to borrow the amount you need, as two incomes may strengthen the overall application. But joint borrowing also comes with important risks, including the impact on your credit file and the fact that both people become financially linked for the duration of the loan.

Key takeaways

• Joint loans can be secured (using an asset as security) or unsecured (no asset required).
• Both applicants undergo credit checks based on their income, spending and credit history.
• Each person is fully liable for the repayments, so if one cannot pay, the other must cover the shortfall.
• Combining two credit histories may improve eligibility for some applicants, but does not guarantee approval.
• A joint loan simply means more than one person is responsible for repaying the full amount.

This guide explains how joint personal loans work, how lenders assess two people and the key points to consider before applying.

What is a joint personal loan?

Joint loans work in a similar way to individual personal loans, but both applicants are equally responsible for repaying the entire balance. The loan appears on each person’s credit file for the full term, and any missed or late payments will affect both credit score and credit files. Lenders can ask either borrower to repay the full amount if payments fall behind, and the financial link remains in place for as long as the account is active.

• Two people borrow together under joint and several liability.
• The account appears on both credit files for the full loan term.
• Missed payments affect each person’s credit record.
• The financial link remains until the loan is fully repaid.

How do joint personal loans work?

When you apply for a joint personal loan, both applicants complete the application together and provide their individual details. Some lenders require both parties to live at the same address; other lenders are more flexible. The lender then assesses each person separately and as a pair to understand whether the repayments are affordable for the household as a whole.

During the assessment, lenders look at income, regular spending, existing borrowing and each applicant’s credit history. They also consider how your finances interact, including any shared bills or commitments, to build a picture of overall stability and affordability. Two incomes may strengthen an application, but approval is never guaranteed and each person still needs to meet the lender’s criteria.

Loan amounts, interest rates and terms are set based on the combined affordability outcome. The lender will only offer a loan if the repayments appear manageable for both applicants over the full term, taking into account current borrowing and any financial pressures already in place.

• Both applicants complete the application together.
• Lenders assess income, spending, debts and credit history for each person.
• Affordability is calculated on both individual and joint finances.
• Loan amounts and rates depend on the combined assessment.

What should you consider before applying?

Before applying for a joint personal loan, it is important to understand how the decision affects both people. A joint application links your finances and means each person is responsible for repaying the full amount, not just their share. This can be helpful for some households, but it also increases the level of commitment for each borrower.

Some applicants choose a joint loan because two incomes may support affordability, especially if one person might not qualify for the same amount on their own. Others use joint borrowing to manage shared expenses in a single monthly payment. However, both people will be credit checked, and both credit files will show the loan for the full term.

If one person cannot or chooses not to pay their part, the other person must cover the shortfall. Missed payments will appear on both credit records and may affect future borrowing options for each applicant.

• Both people become responsible for repaying the full loan.
• Each applicant undergoes a credit check and affordability assessment.
• The loan appears on both credit files for the entire term.
• If one person cannot pay, the other must cover the repayments.

Types of joint loans

Is it a good idea to take out a joint loan?

A joint personal loan can help two people borrow together and manage a shared financial commitment. Combining incomes may strengthen an application or increase the amount you can borrow, but the decision must still meet the lender’s affordability checks.

Both applicants are responsible for the full balance, and the loan will appear on each credit file for the entire term. This makes it important that the repayments fit comfortably within both budgets and that each person understands their responsibilities before applying.

Pros of joint personal loans

• Two incomes may improve overall affordability.
• Can help one applicant qualify when applying alone may not be possible.
• Provides one shared repayment instead of managing separate borrowing.
• Positive repayment history can benefit both credit files.

Cons of joint personal loans

• Both people are responsible for the full balance, not just their share.
• Missed or late payments affect both credit files.
• Creates a financial association until the loan is fully settled.
• Removing someone from a joint loan is difficult and may require refinancing.
• If circumstances change, one person may be left covering the full repayment.

It is important to think carefully about who you take out a joint loan with. Because both people become responsible for the full amount, the arrangement tends to work best when both applicants have a similar approach to money and are comfortable managing shared financial commitments. This can help reduce the risk of one person falling behind on repayments and protect both applicants’ credit records. It can also help to think about how stable each person’s income is, how the repayments will be shared and what would happen if circumstances change.