Many couples who are renting or buying a flat together decide to apply for a joint loan, to cover the cost of moving or decorating. Whilst this type of loan is offered by many lending institutions, including Norton Loans, and certainly has its advantages – (not only is it a great way to cover immediate expenses and share the financial responsibility, but it also tends to make couples eligible for lower interest rates and a larger loan amount) – it’s important that people considering taking out a joint loan are aware of the fact that both parties will be held equally liable, even if just one of them ends up defaulting.
Lending institutions like Norton Finance want to make sure that the people they loan money to will be able to pay it back – and the fact is that two people with regular incomes are far less likely to default that a single person, meaning that the risk to the lender will be lower, and they will therefore be more inclined to offer a good deal.
It’s important to note that lenders will take the nature of the relationship into account when two people apply for a joint loan. For example, there are some lenders who prefer to offer loans only to people who are blood relatives, or those who are married. However, different lenders have different criteria, so if you want to apply for a loan with someone, but are not married or related to them, you may still be able to find a lending institution willing to accept your application.
You should carefully consider you and the other person’s financial circumstances, as well as how much you really need to borrow. If you one or both of you have a bad credit history, traditional loan providers may not be willing to lend you money, in which case you may need to use a lender that specialises in poor credit. In addition to this, sometimes, lenders such as Norton Loans may only allow a secured loan, if your income is not steady, or the loan amount is quite large.
Do your research before choosing your loan provider; compare loan features and examine interest rates that are being offered. Calculate how much you would have to repay in total, and make sure that you can comfortably afford the repayment amount that would be owed each month. Lastly, don’t forget to read the terms and conditions of the loan agreement you sign.