Whoever wants to take out a loan must have a good credit rating. Banks have three approval criteria, which are sufficiently high income, permanent employment and a clean job, and if the loan seeker can meet these conditions, there is nothing to prevent a loan. But sometimes the income is too low. Then a loan with two borrowers can bring prospects of success.
Anyone who asks banks for a loan is put through its paces. Income is put to the test, Credit Bureau is queried and permanent employment is checked. If you do not have a sufficiently high income that shows a attachable share, you will fall through the bank grid. The income for a four-person household must be 2,500 USD net in order to be considered sufficient.
The Credit Bureau is also one of the three approval criteria. If negative entries are noted, a loan can be rejected. The risk is simply too high for banks. However, there are banks that provide a loan if the negative entry is easy, for example if an invoice was not paid. Hard negative entries such as attachments, foreclosures or bankruptcies completely rule out lending.
These entries in the Credit Bureau reduce the creditworthiness of the customer, which he noticeably notices in the higher interest rates when the loan is approved. However, a loan can also be rejected. The bank will then ask for collateral. This could be a property or a loan that can be lendable. But the 2nd borrower also increases the credit opportunities.
Then a loan can be realized with 2 borrowers. The creditworthiness is increased and the conditions are better, even if the income is not so high. The bank then has practically two salaries for credit with 2 borrowers as credit protection.
But conditions are also placed on the second borrower. So a credit rating has to be perfect. His income must be sufficiently high and come from a self-employed activity that is not limited in time. The income must also not be pledged. In addition, the Credit Bureau must be in order. Banks also recognize income from part-time work. This increases the creditworthiness of a loan with two borrowers.
The advantage of the 2nd borrower
If a loan is taken out with two borrowers, both borrowers are joint debtors. You are responsible for the cost of the loan. In the best case, the borrower should have the higher income. There is also lending with even three people. The same conditions apply as mentioned above.
Borrowers have to prove their income on the basis of credit documents. You have to provide information about your place of residence, income and expenses, as well as information about the employer. The second borrower must also not have a debited Credit Bureau.
The customer should know that it is not enough for the bank to draw up a budget; he should also ask himself whether he can pay a loan at all. Therefore, the preparatory work should be in drawing up a budget. If there is a plus in the calculation, the picture is favorable. The borrower can also estimate how high the current installments may be and how much they can be paid.
If you now choose a short term, you have to expect higher rates, a long term therefore has lower rates. The loan is more expensive overall, but it remains affordable.
Since the loan with two borrowers shows only a small risk of default, the loan is given at low interest rates. But not only the interest rate is important, a cheap loan has free special repayments and one or two installments.
The credit comparison
Even if the 2nd borrower has favorable conditions, a loan comparison should still be carried out. The type of loan is irrelevant, this can be a normal installment loan or consumer loan. With the credit comparison, the customer can compare the providers with one another and then decide. The loan application can then be made directly via the loan comparison.