Higher credit chances through joint loans

If you have applied for a loan and your application was rejected rather quickly by the credit bank, this may be because you do not have the required credit rating. The banks protect themselves against the risk of non-payment and make a credit check of the credit applicant. Many banks charge interest on the loan depending on the creditworthiness of their borrowers. If your loan application is rejected, this is not only to protect the bank from a possible default, but also for your own protection. Banks want to protect applicants who cannot demonstrate sufficient creditworthiness from falling further and further into the debt trap and perhaps into personal insolvency. If you can not provide the required collateral for the loan, you still do not always have to give up a loan, because you can bring your partner on board or provide a guarantor.

Better credit chances with a co-applicant

Credit together as a couple or co-applicants

With a co-applicant, you have a better chance of getting a loan; the prerequisite is that the co-applicant meets the creditworthiness requirements and can provide collateral. As a rule, the co-applicant is the partner of the main applicant, it does not matter whether the two partners are married or not. It depends for the credit granting on an appropriate income, so that the current expenditures can be covered and the borrower also still has enough money left for living and for unforeseen expenses. If both partners can prove a solid income and, ideally, collateral in the form of life insurance, fixed-term deposits or real estate is available, the chances of obtaining a loan are good.

Since the banks often set the loan rates depending on the creditworthiness of the applicant, you can often also save on credit costs. Especially for loans with a large sum, as is the case with construction and real estate loans, you have better chances with a co-applicant. Even for smaller loans such as modernization loans or simple installment loans, a co-applicant can significantly improve the chances. This is especially the case if you only have a low income because you are still in training, studying or experiencing a financial lean period due to unemployment.

The co-applicant is personally liable. If you get into payment difficulties as the main borrower, then the co-applicant is asked by the lender to take over the installment payments. The co-applicant guarantees with his signature on the loan application to take over the payment obligations of the main applicant. You as the main applicant, but also the co-applicant, must submit various documents with the loan agreement to check creditworthiness – bank statements and proof of income are among them.

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What happens in the event of a partnership separation?

Separation or divorce in the case of joint credit

If your partner has agreed to sign the loan application as a co-applicant, a breakup can always happen for a variety of reasons. If this is the case, then you must be jointly liable for the full amount. The creditor decides from whom he will demand repayment of the remaining debt. It is now important to arrange a fair distribution of the debt between both partners. If you were not married, you can agree with the ex-partner that he pays half of the installments to you, if the bank has chosen you to pay the installments. In the case of a divorce, the settlement between the two spouses can be settled by a lawyer, here the joint debts must be taken into account in part in the calculation of spousal support.

The guarantor – a sensible alternative

If you cannot meet the creditworthiness requirements for a loan and you are not living in a partnership, you do not always have to give up your hopes of getting a loan. An alternative to the co-applicant is the guarantor – this can be someone from your family, but also a good friend who can prove the appropriate collateral. Legally, the guarantor does not have as high a status as a co-applicant, but it can significantly increase your chances of getting a loan. It is important that the guarantor has a very good credit rating. So he should be able to prove a correspondingly high income or even valuables, real estate or life insurance. It is important that the guarantor does not have a negative record with Schufa. If you as a borrower can no longer pay the installments for your loan, then the bank turns to the guarantor, who must then take over the installment payment. However, the conditions for a loan, if you provide a guarantor, are usually not as good as with a co-applicant.

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