If your credit score isn’t too great, getting approved for car finance can sometimes be a tricky business. And while certain companies (including Creditplus), can often provide finance solutions for those with bad credit, you’ll usually find the interest rates offered are much higher because you’re considered a greater risk to lend to.

However, if you’re struggling to get accepted or the available interest rates are too high there is another alternative. If your partner has a good credit score, why not see if they are willing to apply for a joint loan with you?

In this article we explain all you need to know about making a joint loan application, to help you decide whether it’s the best option for you.

1. What is a Joint Loan?

A joint loan application is when two people share the responsibility of the loan. When you apply for a joint loan, both you and your partner are required to provide your full details.

The information required may vary slightly between lenders, however you can expect to be asked for the following information:

 Your personal details; Date of birth, contact details, marital status etc

• The amount you wish to borrow
• Employment details; current job role, salary
• At least 3 year’s employment history
• At least 3 year’s address history

With a joint application, both of your details are taken into consideration. For example, lenders will look at your combined salary to determine whether you can afford the loan. Therefore, if one of you works part-time and has a low income, this will not necessarily be an issue to lenders if the other is earning a sufficient income.

2. Who Can Be Approved for a Joint Loan?

As with all credit applications, there are many factors that determine the outcome of your application, and because all lenders use their own criteria for approving loans, there is no guaranteed way of knowing if you’ll be approved.

However, to qualify for a joint loan at least one of you must have a full driver’s licence and at least one of the applicants must be in full-time employment. You must also be able to prove that you and your partner are living together to be eligible for a joint loan.

Of course, the better your credit scores are the more likely you are to be approved for a car loan. If you both have good credit scores, it’s very likely you’ll be approved. If one of you has a good credit score but the other has a low credit score, you will likely still be eligible. However, if you both have a bad credit score then you may find it more difficult.

3. What Are The Benefits of a Joint Application?

So, what’s good about joint car loan applications? Well for starters, both of you are responsible for making the repayments. Knowing someone else is there to help shoulder the burden can massively reduce the stress and worry around borrowing money. 

You may also find a joint loan allows you to borrow more money than if you were to make an application by yourself, and as a result you could drive a car you wouldn’t otherwise be able to afford.

4. What Are the Risks Involved in Taking Out a Joint Car Loan?

As with all big financial decisions, there are certain risks involved and it’s important to address these so you know how to deal with them should something go wrong.

With a joint loan, things can get complicated if you and your partner end up going your separate ways before the loan agreement has been settled because you would both still be responsible for the payments.

In this scenario, the best resolution is usually for one person to take over the contract or for the contract to be cancelled altogether. But of course, ending a loan early will usually involve cancellation fees.

Another thing to be aware of with a joint loan is, if one of you can no longer pay their part of the finance agreement, this will be recorded on both your credit files and will negatively affect both your credit scores.

5. What is The Difference Between a Joint Application and Having a Guarantor?

Having a guarantor is also an option if you’re struggling to get accepted for car finance on your own, however it works differently to a joint loan.

A guarantor is only responsible for the car finance payments if the main applicant defaults. So instead of equal responsibility of the repayments, as the main applicant you are still expected to make the full payments for the length of the contract.