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Taking a joint application personal loan can come with its benefits. Being in the same page at all times will ensure that there is less stress and more benefits when it comes to taking a personal loan out with a friend, spouse, or a family member. Before you proceed to be bind yourself to a dual contract here are five tips that you will have to keep in mind.
Be aware that you will both shoulder the responsibility
Before you even take out a joint personal loan you will have to understand the full implications that come with it. As a co-borrower of the loan you are equally liable for the debt that comes with the loan if the other is unable to meet repayments. You will have to really know and trust the person that you are taking the loan on with.
You will both have to meet the loan criteria
When applying to take out a joint loan you will both be evaluated to see if you meet the loan requirements. The benefits that come with this is that you will be able to apply for a higher loan amount, unlike if you applied alone. Before you sign any binding contract, assess to see if the person who you are applying with does not have a bad habit of reckless spending and stingy with money. Just keep in mind that you will have to pay off this loan together until the life of the loan is completed.
Get someone you can hold accountable
To save you the stress rather go with someone who you know is responsible and will play their part in paying off the loan. After all, a lender just needs to follow up on one person to make sure that monthly repayments are met. Being open and honest is the main ingredient to making your personal loan work for you. If things go south with your partner not holding their end of the deal for whatever reason, then you can seek legal advice. It is advisable that you do this before you even put your name on the dotted line as a safety measure.
Crunch the number together
How you start out your joint loan relationship will determine the course of how you will pay it off. It’s advisable that you both carry a 50% responsibility to make it work. Draw up a budget to calculate how much will you need to pay off the loan, and how you can make cuts from your own personal budgets to ensure that this is met on a monthly basis. Be firm with on each other in terms of payments. Its always best to discuss in advance if your partner won’t be able to make payments for a certain period. That way you won’t have to scramble for money to pay off their half.
Be realistic about your current financial situations
Both you and your partner will have to compare loans that are available on the market that suit what you are looking for. If needed, you can enlist the service of a financial advisor who will evaluate whether taking out a joint loan is feasible. Always keep in mind that although taking out a joint personal loan can increase the borrowing amount, should your partner be unable to meet the payments you will have to shoulder the full expense.
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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
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Approval for personal loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.
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