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What is a joint loan?

Understand the pros and cons of sharing a loan

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The decision to borrow money should never be taken lightly, and there are also a range of decisions to make within the loan process itself.

You'll need to decide exactly how much money you want to borrow, how much you can afford to pay each month and how long you want to pay it. You also need to decide if you'll apply for a loan on your own or with someone else.

Key insights

  • A joint loan can be any type of loan, including a home, auto or personal loan.
  • Joint loans are taken out by two or more borrowers who are each legally responsible for repaying the loan.
  • Loans with co-borrowers are not the same as loans with co-signers.

Defining a joint loan

The term "joint loan" describes one loan taken on by multiple borrowers. One borrower is just as legally responsible for repayment as the other, regardless of who actually makes the payments.

This also means joint borrowers have equal access to the loan funds or the asset the joint loan was taken out to finance. For example, if a couple takes out a joint loan to purchase a car, they share equal ownership of that car.

According to Danny Cieniewicz, a financial advisor with Hyperion Financial, joint loans are very common for car loans and mortgages in which two people are married or cohabitating. That said, people don't have to be married or in a romantic relationship to borrow money together.

Co-borrower vs. co-signer

Joint loans are not the same as getting a loan with the help of a co-signer.

  • Co-borrowers each have access to the loan funds or assets, with the same legal obligation for repayment.
  • Co-signers do not hold any ownership of the funds or assets but still agree to be legally responsible for repayment if the primary borrower can't or won't pay.

Ultimately, co-signers usually enter the picture when the primary borrower doesn't have the credit score or income to qualify for funding on their own.

» MORE: Co-signing a loan: pros and cons

Joint loan eligibility requirements

Eligibility for joint loans depends on the type of loan you are applying for. There are unique eligibility requirements for various types of home loans, as well as auto loans, personal loans and other types of funding.

Cieniewicz explained that joint loans offer the advantage of letting one borrower benefit from the better financial position of the other. For example, a borrower with a less-than-perfect credit score may be able to qualify for a higher credit limit, a lower annual percentage rate (APR) or both if the other borrower on a joint loan has great credit and a high income.

» MORE: Requirements for personal loans

When to get a joint loan

There are numerous situations where joint loans make sense, although plenty of personal factors come into play. For example, it doesn't make sense to take on a joint loan with someone who's not on the same page with you about money unless you absolutely have to do so.

Joint loans are typical among married couples and domestic partners who share finances — no matter where they each stand with their finances. After all, these relationships are where the loan funds or assets purchased are more likely to be shared by both borrowers.

Cieniewicz said that joint loans are also common for student borrowers who need private student loans, since they may not have any credit history. Often, a parent or trusted relative is listed as a co-borrower or potentially a co-signer.

Joint loans can also make sense when someone with poor credit needs more favorable terms. However, Cieniewicz recommends that there be direct communication between the borrowers to make sure a plan is in place to repay the loan in this type of situation.

"In the event of a default or if one party does not repay, that could cause issues for both credit scores and could cause resentment between the two borrowers," he said.

Pros and cons of joint loans

If you're considering taking out a loan with another person as a co-borrower, you should first know the potential advantages and disadvantages.


  • Easier to qualify: With two borrowers, getting approved becomes easier. This is especially true when at least one borrower exceeds the eligibility requirements.
  • Higher loan amounts: You may get approved for a higher loan amount than you would if you applied on your own. Joint loan applications consider the income of both parties instead of just one.
  • Better loan rates and terms: If one borrower has better credit and a higher income than the other, this can help you qualify for a lower interest rate or better repayment terms.
  • Share equal responsibility with a partner: If you're sharing loan funds or an asset with a partner, it makes sense to share the legal responsibility for debt repayment.


  • Different views on money and bills: If the other borrower doesn't take their financial commitments seriously, this can mean taking on a disproportionate amount of responsibility for repayment.
  • Fewer loan options: Depending on the loan type, you may find fewer lenders that allow joint applications. For example, not all personal loan companies allow joint loans.
  • You put your credit at risk: If the other borrower doesn't make their share of loan payments, you could face damage to your credit score.
  • Strained relationships: Sharing loans with another person leaves the door open to financial disagreements, particularly if you're in a romantic relationship that may not last.

What to consider before applying for a joint loan

Before you take on a debt with another person, Cieniewicz recommends speaking with the other borrower to make sure you both have a clear understanding of who will be responsible for paying the loan. For example, who will make each monthly payment, and when?

"If you're a co-borrower, you're both named on the loan, both have access to the loan dollars and are both equally responsible for its repayment," he said.

Also, consider whether you might be better off with a different borrowing situation altogether. If you're in a new romantic relationship, you may want to borrow on your own and avoid joint loans until you're sure your relationship will stand the test of time. If a friend asks you to be a co-borrower, think long and hard about what you're risking and if you're willing to lose the relationship if something goes wrong.

In the event of a default or if one party does not repay, that could cause issues for both credit scores and could cause resentment between the two borrowers.”
— Danny Cieniewicz, Hyperion Financial

For the most part, both parties should benefit from a joint loan, or the loan won’t be a good idea from the start.

» MORE: Best ways to borrow money

Alternatives to joint loans

If you're on the fence about a joint loan, consider the additional financing terms at your disposal.

Individual loans

If you and the co-borrower are planning a specific purchase that requires a loan, you could get two individual loans (one in each name) to get the funding you need. While this wouldn't work for a home purchase or a car in most cases, you could take out two individual personal loans to finance new furniture or kitchen appliances for use in a shared home.

Loan with a co-signer

There are also situations where co-signing on a loan — or asking someone else to co-sign — makes sense. In this instance, the co-signer is legally responsible for repayment and may need to take that over completely if the primary borrower decides not to pay or can't pay.

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    Who is responsible for making payments on a joint loan?

    Both parties are legally responsible for making loan payments with a joint loan. However, the two parties can still decide who will make the loan payments over time or during any given month.

    Can a joint loan help my credit score?

    A joint loan can help your credit score if all payments are made on time. That's because both FICO and VantageScore treat your payment history as the most important determinant of your credit scores.

    Are there different types of joint loans?

    Joint loans can come in many forms, including personal, home and auto. Any loan can be a joint loan as long as there’s more than one borrower on the loan application.

    Can a joint loan be modified or refinanced?

    Joint loans can be modified or refinanced, but the terms that apply can vary based on the loan type. Also, note that both borrowers have to agree to refinance or modify the joint loan.

    What are the obligations of a co-borrower or co-signer on a joint loan?

    Co-borrowers on a loan are legally responsible for the repayment of the loan funds, yet they also get access to the loan money or the underlying asset it bought. Co-signers are only legally responsible for repaying a loan when the primary borrower can't or won't pay the money back.

    Bottom line

    Joint loans can make sense in some situations, and they're especially common among couples sharing finances and a home. That said, loans with more than one borrower can get complicated. Think long and hard before taking out a joint loan with a new partner or someone you haven’t known very long.

    "A co-signed or co-borrowed loan will show up on your credit report as if it's yours, meaning you must make sure this decision isn't taken lightly," said Cieniewicz.

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Experian, "What Is a Joint Loan?" Accessed Aug. 8, 2023.
    2. Experian, "Co-Borrower vs. Cosigner: What’s the Difference?" Accessed Aug. 8, 2023.
    3. Upstart, "Can personal loans be in joint names?" Accessed Aug. 8, 2023.
    4. FICO, "What's in my FICO Scores?" Accessed Aug. 8, 2023.
    5. VantageScore Solutions, "The Complete Guide to Your VantageScore." Accessed Aug. 8, 2023.
    6. Digital Federal Credit Union, "What is a Joint Loan?" Accessed Aug. 8, 2023.
    7. Prosper, "Can I apply for a joint personal loan?" Accessed Aug. 8, 2023.
    8. Consumer Financial Protection Bureau, "What is a co-signer?" Accessed Aug. 8, 2023.
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