"Disclaimer: This article is for general educational purposes only and is not intended to imply that Citi offers the product or product features discussed herein. Citi may have different product offerings and/or eligibility criteria than those mentioned in this article."
Key insights:
- If your lender allows, you may be able to apply for a personal loan with another person — for instance, if you and a spouse plan to share the responsibility of repaying a loan for a home repair
- You generally apply for a joint personal loan the same way you apply for an individual loan, except you provide both applicants' financial information, per your lender’s requirements.
- Applying for a joint personal loan with someone who is more creditworthy could make it easier for an applicant with less-than-ideal credit to qualify
- By combining incomes, 2 people could potentially qualify for a larger loan amount with a joint personal loan
- Please note that Citi does not offer personal loans to joint borrowers
A joint personal loan is a loan taken out by 2 people, called co-borrowers. Both borrowers are equally responsible for repayment, and both credit profiles are considered in the application process.
Say you and a spouse want to, or you and a friend are moving cross-country together. A joint personal loan may help you both get the money you need to accomplish these goals.
How does a joint personal loan work?
If offered by a lender, both borrowers share the responsibility of repaying a joint loan and use their collective financial information to qualify.
When you apply, the lender will perform a hard credit check, which may temporarily lower both of your credit scores by a few points. A lender will also typically review your incomes, debt-to-income ratios (DTIs) and other financial factors to get a complete picture of both applicants’ finances.
If approved, a personal loan’s funds are usually deposited directly into a bank account or issued by check. Both borrowers should have equal access to the funds, and both are equally responsible if you miss any payments. Failing to make payments could result in negative impacts to both of your credit scores.
Who is responsible for repaying a joint personal loan?
Regardless of who uses the loan or who makes the payments, both co-borrowers are accountable for repaying the entire loan amount. This means if one person is unable to make their portion of the payment, the other borrower must cover the shortfall to avoid late fees or damage to their creditworthiness.
Importantly, a joint personal loan is different from having a co-signer. With a joint personal loan, co-borrowers share ownership of the funds they receive. Co-signers don’t have access to the funds, but they are responsible for repaying the loan if the primary borrower defaults.
Pros and cons of joint personal loans
Joint personal loans can provide flexibility and greater borrowing power, but they also come with risks. Here’s what you might need to consider:
Pros
- May be easier to qualify: Lenders who allow co-borrowers consider both applicants’ credit profiles and incomes, so it may be easier to qualify for a joint personal loan.
- Potentially better terms: Because the lender considers both applicants’ finances, you may be able to secure more favorable loan terms, such as a lower annual percentage rate (APR) or a higher loan amount.
- Potentially positive impact on credit: Both borrowers’ credit scores can benefit from on-time payments.
Cons
- Impact on relationships: If one borrower demands full control over the funds, fails to make payments or doesn’t use the funds as agreed, it can strain the relationship.
- Credit and DTI impact: The loan will appear on both borrowers’ credit reports. Missed payments can damage both borrowers’ creditworthiness. The amount borrowed also contributes to both borrowers’ DTI.
How to apply for a joint personal loan
A personal loan joint application is typically similar to applying for an individual personal loan. Both applicants will need to supply the same information. Here’s a quick overview of the process:
- Choose a lender: Research lenders that offer joint personal loans and compare interest rates, loan terms and eligibility criteria. Consider pre-qualifying to see how much you may be able to borrow and what the rate and term could be. Citi does not offer co-borrowing on personal loans.
- Complete the application: Both applicants will need to provide personal information and documentation, including Social Security numbers, income details, proof of income, proof of address, identification, date of birth, legal name and employment history. When you submit the application, the lender will likely check both borrowers’ credit history.
- Wait for approval: The lender will review your application and decide whether you qualify.
- Review the loan terms: If approved, both borrowers review and accept the loan terms, including the interest rate, repayment term and any fees.
- Receive funds: The lender will deposit funds electronically or issue a check.
Citi offers personal loans to both existing Citi customers and new Citi customers that meet specific eligibility criteria, including an established credit and income history, along with additional factors determined by Citi. Citi doesn’t offer joint personal loans, but if you want to see what kind of terms you may be eligible for as an individual borrower, you may check your rate online with no impact to your credit score. If you think you could benefit from a Citi Personal Loan, apply online today.
This article is for general educational purposes. It is not intended to provide financial. It also is not intended to describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.
