Second loan: Better chance of acceptance, cheaper interest rates

Many loans are shared by two people. 

Often these are life partners who want to finance the larger purchases with the borrowed money. But what requirements must a second borrower bring? Who is liable for a threatening loan default? And when is a second signature under the loan agreement useful at all? Learn here what you should know about two-person credit.

 

When is it worthwhile to take out a loan for two?

Two borrowers mean more security from the bank’s point of view, that’s clear. The model is very simple: Instead of one person, two persons sign the loan agreement as debtors. In practice, these are often married or life partners who want to make a joint purchase. For example, a family car , a new kitchen facility or even your own house . Because both sign the loan agreement, both are liable “jointly and severally” for the repayment of the loan. In concrete terms this means that if the installment payments fail to materialize, the lender can access either of the two debtors with his entire claim.

Important to know: spouses are not obliged to sign a loan together. If one of the two partners takes out the loan on their own, they must repay it on their own.

Who is suitable as a second borrower at all?

Banks, of course, like to see a second borrower if they have two fixed salaries to repay the loan. If a loan applicant alone does not fulfill the conditions of acceptance, for example because his income is insufficient to pay off the installments, banks often even make a second borrower with good credit standing a condition for lending. The second borrower should be able to demonstrate a regular income well above the attachment exemption limit of € 1,140 net (as of 2018) and a permanent employment relationship. In addition, the second person should of course have a proper Schufa information . The following rule of thumb applies: The higher the desired credit and the more limited the creditworthiness of the applicant, the sooner the bank will require a second signature. The good thing about it: because the double income reduces the likelihood of credit losses, two common borrowers often receive higher loan amounts. This gives borrowers noticeably cheaper interest rates.

What should you pay particular attention to with the two-person loan?

The second borrower accepts by his signature all obligations under the loan agreement. The bank can personally demand all due payments as soon as the repayment stagnates, even if it earns significantly less than the other. In addition, the second borrower may not pay half the monthly installment and ask the bank to get the other 50% from the first borrower. Changes in living conditions do not change the repayment obligation. Both borrowers continue to be fully liable for the entire remaining debt if they have long since separated as a life partner and one of them no longer benefits from the loan – for example, because he has long since moved out of the jointly financed house or the ex-partner Alone has the car purchased from the loan.

Any questions? We are happy to help!

A second borrower often helps you to significantly increase your chances of getting the loan you want with better interest rates. Direct banks often make better offers than the local branch bank. You need a loan and would like to know what individual benefits a two-person loan can offer you? Just talk to us – our credit experts will be happy to advise you personally and show you attractive options!