Joint cash loan - how to apply? What to remember?

A joint cash loan can be a good solution in a situation where a person seeking financing does not have sufficient creditworthiness to receive funds from a bank. However, the decision to take out a loan with a co-borrower should be well thought out, because it entails a number of consequences. What is worth knowing? What is a joint cash loan? Who can apply and when?

What is a joint cash loan?

You can apply for a cash loan, as well as a mortgage loan, on your own or with another person who, in banking terminology, becomes a co-borrower. This can be either a family member, such as a wife, husband, sister, brother, mother, father, cousin or son, or an outsider, that is, a friend, colleague or co-worker. In the norms of banking legislation, as well as other acts and documents relating to bank loans, there are no provisions that would regulate the question of who can become a co-borrower. Thus, you can apply for a joint loan with any person who has the appropriate creditworthiness.

Joint cash loan - for whom?

As we already mentioned, you can apply for a joint cash loan with anyone, but it is worth having a trusted person. Why? Since co-borrowers have the same rights and obligations in connection with the financing received, they must regularly repay parts of the obligation. It happens, however, that the future borrower has low creditworthiness, because he has never taken on financial obligations in banks, which is why he decides to take a joint loan, and his “partner” is included in the loan agreement only for formal purposes. In fact, the installment plan is repaid by the person who needed the financing. However, it is worth remembering that when entering into a joint loan, only formally, it should be borne in mind that in the event of an irregular repayment of the obligation by another borrower, both persons will be required to repay, and any late payment of installments will be recorded in the credit history bureau.

When answering the question of who can apply for a joint cash loan, it should be added that two questions will be important for the bank. These include:

• creditworthiness - These are the factors that the bank takes into account when evaluating a client. For the implementation of each of them, the bank accrues the corresponding points, which is called bank scoring. The borrower’s creditworthiness is affected by parameters such as, but not limited to: the amount of income received, type of contract, length of service, occupation, age and marital status, number of people in the family, amount of monthly fixed expenses and the number of financial obligations currently repaid.
• credit history in BIC - Another important issue is a thorough check of the credit history of a potential borrower. It can be seen in the Credit Information Bureau, where you can find information about all credit and loan obligations of the client. First of all, the bank looks at how the loan applicant coped with the repayment of his obligations in the past - whether they were paid on time. This will allow you to predict whether a given client will reliably and timely repay the installments on the next loan. In BIK, you can check the customer’s historical and current loans and borrowings, as well as the amounts they have applied for.

Therefore, obtaining a joint cash loan depends primarily on the financial situation of the people applying for it. So you should take care of your high creditworthiness in advance. In the case of two borrowers, the bank adds up their income, which increases their creditworthiness, and they can count on higher liability.

What documents are required to apply for a loan with a co-borrower?

To obtain a joint cash loan, the bank requires the provision of basic documents that are necessary for obtaining financing. Each of the borrowers must submit documents for themselves. These include primarily:

• valid ID,

• certificate of income from the employer,

• Statement from the bank,

• application for a joint cash loan.

Co-borrower - what are his obligations?

By law, each borrower has the same rights and obligations. Their main duty, of course, is the repayment of loan payments in accordance with the schedule received from the bank. The co-borrower, regardless of whether he entered into the agreement only for formalities or used the loan together with another borrower, will bear the same consequences of late repayment as the other person.

If the bank does not receive the loan payment on time, the co-borrowers will receive requests for payment and information on the amount of accrued interest. In addition, their data will be in debtor registers such as Biuro Informacji Kredytowej or BIG InfoMonitor, making it difficult for them to apply for any funding in the future, including, for example, when buying in installments or obtaining a loan. card. The next steps that the bank takes in case of non-receipt of payment for the installment plan on a joint cash loan is to initiate a lawsuit and contact the bailiff.

Therefore, it is very important to apply for a joint loan with someone you can trust and who will repay the debt on time. Each borrower will repay that part of the loan, which he agreed with another borrower. It may happen that one of them needs PLN 20,000, and the other only PLN 5,000, then the installments will be paid by them proportionally.

How to get a joint cash loan?

Before applying for a joint cash loan, you should think carefully about the amount of loan you will need. You should not claim a higher amount than would be really useful - every złoty you borrow must be returned to the bank with the appropriate interest and additional fees. In addition, you must make sure that you have a high creditworthiness and that you have no outstanding obligations and that you are not behind on the payment of installments on current obligations - everything will be visible in the BIC.

A joint cash loan is available from many banks and non-bank companies, so you can choose an institution that will meet the borrower’s expectations and requirements. Offers can be compared, for example, using an online cash loan comparison site. After choosing a suitable product, you need to fill out an application for a loan. Some institutions allow you to apply for a joint loan online, which is very fast and convenient. All formalities can also be completed at a stationary branch of the bank, so each borrower can choose the most convenient way for himself.

What is the difference between a co-borrower and a guarantor/donor?

The concepts of co-borrower and guarantor, who is also a resident, are different, although they are often confused. The co-borrower can use the loan funds in the same way as another borrower - on terms agreed by both parties. The bank treats them equally, and they have a joint obligation to repay the debt. The guarantee does not receive funds from the loan, which means that it cannot dispose of them. He acts as a guarantor and thus certifies that he will pay the amount due when the borrower fails to do this and stops paying in installments. At any time, he can check whether the debt is repaid according to the agreed schedule - for this he must contact the bank and request information about the repayment.

Thus, the role of the co-borrower is associated with greater responsibility, since the bank requires him to pay monthly installments on time and in the appropriate amount.

Should I apply for a joint cash loan?

Let’s look at the strengths and weaknesses of such a decision so that anyone who is thinking about applying for a joint loan can make a decision.

Joint Cash Loan - Benefits

• increase in creditworthiness - the bank will take into account the amount of earnings of two people, so the creditworthiness will automatically increase; However, it is worth remembering that it is influenced by many other factors,
• the opportunity to apply for a large amount - the amount of income of both borrowers will allow them to get a loan of a larger amount and with a more attractive loan term,
• the ability to share funds from the loan on your own terms - co-creditors agree among themselves the rules for disposing of the funds received; some of them may want to receive a smaller amount or appear in the loan agreement only formally, helping a loved one in obtaining financing,
• the possibility of applying for a loan with an unrelated person - not every couple decides to get married, which means they will not be able to get a marriage loan; in the case of a joint loan, cash borrowers may be unrelated persons, i.e. persons living together.

Joint Cash Loan - Disadvantages

• joint responsibility for repayment - you should always remember that the co-borrower must be a close and trusted person, because each borrower has the same obligations to repay the debt on time; in a situation where one of them does not repay his part of the contribution, the entire responsibility lies with the other person,
• entries in the database of debtors in case of late repayment - in case of untimely repayment of loan payments, the bank sends requests to borrowers for payment, and at the next stage, it requests records in debtor databases, such as BIC or BIG InfoMonitor. Both borrowers will be penalized, regardless of their share in repayment of the obligation and how they divided the received funds with each other.

The decision to apply for a joint cash loan or any other financing from a bank or lending company should always be well thought out.