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Should i go for a joint loan

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Fanny
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Subject: Should i go for a joint loan
 
Posted on Tue Mar 30, 2010 10:01 am  

Hi,

My boyfriend is about £2000 in debt, and he has been unable to get a loan to pay it off even though he has a permanent job. This may be because he has bad credit.Thus, I would like to know if I can try to get a joint loan to help him get the money so that he can pay his debt off.

I have only 2 credit cards, and I always make on-time payments. I haven't ever taken a loan. So, do you think this will work? Can the loan be transferred into his name once we get it? We have no home or car or any kind of assets.

Thanks
Aaron

Aaron

Joined: 08 Feb 2010
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Posts: 2632



48565 Magic Points

Subject: joint loan
 
Posted on Tue Mar 30, 2010 10:24 am  

Fanny,

Getting a joint loan means, the credit of the other person will affect your credit. Specifically in your case, your boyfriend has a bad credit. Thus, if you are going to take a joint loan, his bad credit will negatively affect your credit.

Yes, the loan can later be transferred in his name. You can later even take off your name from the joint account.

Hope this helps.

Regards,

Aaron
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NightStar



Joined: 10 Mar 2010
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Posts: 142
Location: Illinois


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Posted on Wed Mar 31, 2010 5:55 am  

I would recommend against applying for a joint loan, you are not married and his credit can not affect your credit, but on that one particular account his bad credit can affect the terms of the join account. He will affect the interest rate offered.

Plus when he wants to take over the account, I highly doubt the creditor will let you walk away from the loan, because they will see his bad credit and want a guarantee that you are stuck responsible for paying if he fails to follow through.

I see this all of the time when married couples are getting divorced, the lenders refuse to let one party out of the loan unless it is paid in full. Then they will close the account and open up 2 new accounts individually in each person's name. But if there is a balance there is no way they are going to let you off.

There has to be another way, usually when one person has poor credit, to help them I suggest maybe you add him as an authorized user on your credit cards. That way he is not responsible for the accounts and the creditors may report the good listings onto his credit report. Just make sure the companies do in fact report Authorized User accounts, not all of them do that. Just don't let him charge to your existing accounts, you are just adding him as an AU to build his credit, you keep the extra card they send, or if they send it to him, ask him to give it back to you.

Does he have a local bank that he does business with, you know savings or checking, maybe he can go in and ask for a secured installment loan to transfer the balance over to at a better rate possibly.

Tell him to stay away from Title Loans, Pay Day Loans, and Personal Finance Loans, these are nothing but trouble, they are no better than scams.
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