By Michelle Flores / Updated: Mar 19, 2020

Pros and Cons of Joint VS Single Loan Application

Choosing Between Joint VS Single Loan Application
One of the most significant worries for many people, and mainly the married couples are deciding whether to apply for a joint or single loan.

Although both cases are almost the same since the borrowed amounts must be repaid, their requirements are entirely different. Therefore, it’s important to consider the pricing and qualification implications of each decision separately.

So, what is the difference between joint and single loan applications, and what would you better go for?

Joint Loans

A joint loan is a type of loan with two or more borrowers. All the loan applicants of the loan are equally responsible for the loan repayment. Hence each borrower has the rightful ownership of what is financed using the credit. Once the borrowers submit their application, the lender evaluates the income of each borrower then approves or disapproves the application.

Advantages of Joint Loans

  • More income – this is the primary reason why many people opt for the joint loan application. Compared to when applying alone, the loan amount is relatively higher.
  • Better credit – if you want to get a loan with poor credit score, the additional borrower can increase the chances of loan approval especially if they have a good credit score.
  • Joint ownership – depending on some circumstances, it makes sense for married couples to have joint ownership of their assets.
  • Repayment flexibility – while applying for the loan jointly increases the chances of qualifying for a more substantial amount, it not a must for the partners to contribute equally towards the repayment. The choice entirely lies in the borrower’s hands to decide how they will help each other to pay.

Disadvantages of Joint Loans

  • Delay in documentation – since there are many applicants involved, the bank may take an extended period to finalize the documentation. However, the process provides the lender with adequate time to endure that the documents are valid.
  • Impact of credit history – when one of the co-borrowers defaults, the credit records of all the others are affected. To prevent this, it’s advisable to confirm the repayment ability of the co-borrower before signing the deal. Also, should one of the partner pull out of the agreement, a new bond agreement is processed and a new credit assessment conducted to verify affordability.

Single Loan

If you are not interested in the joint loan application, then you can do it all alone. This loan is mostly applied by individuals with pressing for cash and don’t have someone they can partner with. However, the amount you get entirely depends on your credit history, your level of income and well as your assets. Should you opt for the single loan? Check out its pros and cons.

Advantages of Single Loans

  • Quick approval – the process of obtaining a single loan is quite shorter as compared to the joint loan application. Why? There is minimal documentation since the applicants are not many.
  • Better management – making money decisions as a group/couple is sometimes hard since different opinions are needed. However, you can make quick decisions alone and even manage the cash in a better way.
  • Less risky – if you have a good loan repayment behavior, then you wouldn’t have to mind off about the co-borrowers who default.


  • Lesser amount – when applying for a single loan, only your income is taken into account for determining the amount you can borrow.
  • Greater impact of your credit score – in case of a single loan, your are solely responsible for the repayments, and the credit score is at a greater risk in case you fail to honour your obligations.

Joint vs. Single – Which One Should You go for?

This entirely depends on your current situation. The information above will help you to make a more informed decision. If you choose the joint loans, make sure that you all come into the same agreement since a single mistake done by one of the partners may affect all of you or even land you into legal trouble.
Joint or single loan application: what is better
If you choose the single loan, be sure to repay the loan as per the agreement to avoid interfering with your credit rating. Above all, involve an experienced financial advisor in the decision-making process to give your clear guidelines.

Works Cited

1 TheBalance “Joint Loans Allow Multiple Borrowers and Owners”

2 SoFi “Using a Co-borrower on a Joint Personal Loan”

3 Financial Rights Legal Centre Fact Sheet “GETTING A LOAN WITH SOMEONE ELSE”

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