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What is a joint application personal loan?

Just as it sounds, a joint application personal loan is simply a personal loan that allows for two applicants to be considered, resulting in shared financial responsibility upon approval. Each of the co-applicants are required to fill out their portion of the joint personal loan application form, as well as submit any necessary supporting documentation to the credit provider.

Why apply for a joint personal loan?

Some of the reasons two individuals might consider applying for a joint personal loan as co-borrowers include the following:

  • To fund a shared expense: If you're going on a holiday or buying a car together with your partner, it might make sense to also have shared responsibility for the cost.
  • To consolidate debt: If you and your partner have multiple debts and/or credit cards in separate names, and are considering merging your finances, you may consider a joint personal loan for debt consolidation purposes.
  • To strengthen your chance of approval: As the lender will assess both applicants' income, along with other factors, you may have a stronger change of approval than you otherwise might have.
  • To borrow a larger sum: If you want to borrow a larger loan amount than you may individually be approved for, a joint personal loan could potentially help.

What can I use a joint application personal loan for?

Just like with standard personal loans, joint application personal loans are available for a wide variety of loan purposes. These include:

What are the pros and cons of a joint application personal loan?
  • Shared responsibility with a reliable partner could relieve financial pressure.
  • May have a stronger chance of loan approval with both borrowers' incomes considered.
  • Potential to borrow more than you might be eligible for individually.
  • If your co-borrower is financially unreliable, there's a chance you may end up being liable for the entire loan amount - or risk defaulting.
  • If one of the applicants fails to meet the eligibility requirements of the loan, the application could be rejected.

How to compare joint application personal loans in Australia

When comparing joint application personal loans, there are a few factors to consider in order to find the most suitable loan for you.

  • Interest rate: The loan's interest rate determines how much interest you will pay on the amount borrowed. It's important to compare interest rates when shopping for a loan, but keep in mind that the advertised rate does not include any additional fees or charges.
  • Comparison rate: In contrast to the advertised interest rate, the comparison rate does include the main fees charged. Comparing different comparison rates can give you a better idea of the cost of the loan.
  • Fixed or variable rate: Fixed rate personal loans can give you certainty with set repayment amounts, while variable rate personal loans can fluctuate with the market. 
  • Secured or unsecured personal loan:A secured loan requires the borrower to provide an asset as collateral, whereas an unsecured loan does not. A secured loan will often have a lower interest rate than an unsecured loan, but the borrower takes on the risk of losing their asset if they default on the loan.
  • Features: Some of the features a loan product might offer include a redraw facility, unlimited extra repayments and flexible repayment options. Consider which features are of value to you to ensure the loan you choose is the most suitable option.
  • Fees: It's important to factor fees into your comparison, as they can significantly increase the total cost of the loan. Some common fees include application fees, establishment fees, ongoing monthly fees and early repayment fees.

How much can I borrow with a joint application personal loan?

To determine how much you can afford to borrow, consider using RateCity's personal loan calculator. It can provide you with an estimate of how much your loan repayments might be, based on your preferred loan amount, loan term, interest rate and credit score. It can also tell you the difference between weekly, fortnightly and monthly repayments, the total amount of interest payable over the life of the loan, as well as the total cost of the loan.

Lenders will assess your income and expenses to determine whether you will be able to service the loan. So, it's important to have an idea of what you can comfortably afford to borrow before you submit an application, in order to avoid having it rejected.

When applying for any financial product, it's important to consider your personal financial situation. For information on credit products specific to your personal circumstances, reach out to a finance broker or adviser.

Frequently asked questions

What is a personal loan?

A personal loan sits somewhere between a home loan and a credit card loan. Unlike with a credit card, you need to sign a formal contract to access a personal loan. However, the process is easier and faster than taking out a mortgage.

Loan sizes typically range from several hundred dollars to tens of thousands of dollars, while loan terms usually run from one to five years. Personal loans are generally used to consolidate debts, pay emergency bills or fund one-off expenses like holidays.

How long do personal loans take?

Depending on the lender, some personal loan applications can be approved in as little as one hour, or you may need to wait until the next business day. If approved, you may receive your money on the same day, the next business day, or within the week.

How are personal loans regulated?

Personal lenders in Australia are regulated by ASIC (the Australian Securities & Investments Commission) and must follow responsible lending rules. That means they can’t lend money without making “reasonable inquiries” about a borrower’s financial situation and ensuring the loan is “not unsuitable” for them.

What are the pros and cons of personal loans?

The advantages of personal loans are that they’re easier to obtain than mortgages and usually have lower interest rates than credit cards.

One disadvantage with personal loans is that you have to go through a formal application process, unlike when you borrow money on your credit card. Another disadvantage is that you’ll be charged a higher interest rate than if you borrowed the money as part of a mortgage.

Where can I get a personal loan?

The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:

There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.

Can I get a personal loan if I receive Centrelink payments?

It is hard, but not impossible, to qualify for a personal loan if you receive Centrelink payments.

Some lenders won’t lend money to people who are on welfare. However, other lenders will simply consider Centrelink payments as another factor to weigh up when they assess a person’s capacity to repay a loan. You should check with any prospective lender about their criteria before making a personal loan application.

Is a personal loan a variable or fixed-rate loan?

Depending on the personal loan lender, you may be able to choose between a fixed and a variable interest rate. But, there are a few distinct differences between the two, so it’s important to weigh up the pros and cons before deciding on what’s right for you.

A fixed interest rate loan gets you the convenience of knowing exactly how much you need to repay each fortnight or month. On the other hand, you generally won’t be able to make lump sum or advanced payments to close your personal loan early - or at least not without a penalty.

With a variable interest rate personal loan, you may be able to get a longer loan repayment term, with the option of paying off the loan early. You typically won’t need to pay any additional charges for an early full repayment either. The potential disadvantage with an interest rate that can change is that your repayment is not entirely predictable, as it can fluctuate with the market. However, you’ll likely have more options as more lenders offer a variable interest rate personal loan.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

Can I merge my personal loan with my home loan?

Yes, you can refinance your home loan and, in the process, merge or consolidate your personal loan and home loan. By doing so, you can lower the number of debts you have, and you may also reduce the total interest you have to pay.

However, you should consult a financial advisor or a mortgage broker to confirm that you are decreasing your total outstanding debt, including interest payments. The repayment term for a home loan can be much longer than that for a personal loan, and by merging the two, you could be repaying a higher amount over the full term.

What is a bad credit personal loan?

A bad credit personal loan is a personal loan designed for somebody with a bad credit history. This type of personal loan has higher interest rates than regular personal loans as well as higher fees.

Should I get a fixed or variable personal loan?

Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.

A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent. You won't have to worry about higher repayments if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

Can I include my spouse’s income on a personal loan?

If you apply for a joint personal loan with your spouse, you can include their income on the application. If approved, they then become jointly liable for the loan.

Both you and your spouse need to meet the eligibility criteria, such as income, age, and residency requirements, as stipulated by the lender. A joint loan could increase your chance of approval for a higher amount, as both borrowers’ incomes are assessed when determining borrowing capacity. 

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

Does refinancing a personal loan hurt your credit score?

Personal loan refinancing means taking out a new loan with more desirable terms in order to access a more competitive interest rate, longer loan term, better features, or even to consolidate debts.

In some situations, refinancing a personal loan can improve your credit score, while in others, it may have a negative impact. If you refinance multiple loans by consolidating these into one loan, it could improve your credit score as you’ll have only one outstanding debt liability. Your credit may also improve if you consistently pay the instalments on time.

However, applying to refinance with multiple lenders could negatively affect your credit if your applications are rejected. Also, if you delay or default the repayment, your credit score reduces.

How long does it take to get a student personal loan?

Completing an online personal loan application can often take anywhere from 10 minutes to 1 hour. Depending on your lender, processing your personal loan application may take anywhere between 1 and 24 hours. If your personal loan application is approved, you may receive the money in your bank account the following business day, or, in some cases, the same day.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Can I get a bad credit personal loan with a guarantor?

Some lenders will consider personal loan applications from a borrower with bad credit if the borrower has a family member with good credit willing to guarantee the loan (a guarantor).

If the borrower fails to pay back their personal loan, it will be their guarantor’s responsibility to cover the repayments.

How much can you borrow with a bad credit personal loan?

Borrowers who take out bad credit personal loans don’t just pay higher interest rates than on regular personal loans, they also get loaned less money. Each lender has its own policies and loan limits, but you’ll find it hard to get approved for a bad credit personal loan above $50,000.

Can I get a fast loan with bad credit?

Some lenders offer fast loans to borrowers with bad credit. Providers of small payday loans of up to $2000 or medium amount loans of up to $5000 may have no credit checks, though these lenders will usually want to confirm you can afford its loans on your income.