17.02.2022 – 08:25
KVB Finance
Limburg (ots)
Married couples share a lot with each other and make numerous decisions together, including financial investments. When financing expensive new purchases, married couples can save money with a joint loan and benefit from many advantages.
In a marriage, almost everything is shared with each other and married couples make decisions together, especially when it comes to financial matters, be it renovating the apartment, buying a car or going on a trip around the world. For these expensive investments, it is usually necessary to take out a loan. But even if the partners decide on this together, they usually do not take the opportunity to take out the loan for two. According to a study by Check24, only 32 percent of married borrowers took out a loan together in 2020, while 68 percent signed a loan agreement alone. Married couples can significantly improve the credit conditions by signing loans for two.
Benefits of a joint loan for married couples
Since married couples usually receive significantly lower interest rates than a single person, they can benefit from a joint loan. Borrowers who took out a loan of EUR 10,000 with a term of 84 months in 2020 paid an APR of 4.01 percent. For loans taken out together with the same amount and term, the effective annual interest rate was 3.08 percent, which corresponds to savings of 345 euros. If the loan amount increases to EUR 20,000, there is even potential savings of up to EUR 612 in interest costs.
Banks usually award interest according to the applicant’s financial situation, i.e. lower loan interest rates apply if the credit rating is excellent. For spouses who take out a loan together, the credit rating increases because the salaries of both partners add up when applying for the loan. For the bank, a second borrower usually means more security and a lower risk of default, so the interest rate is significantly lower. But spouses do not only benefit from lower interest rates. Because they have a higher funding limit, their credit rating improves and their chances of getting a loan approval increase. There is also the option to take out a higher loan amount and negotiate a better tax rate.
Competent support in choosing the right loan
In order to save money and improve their creditworthiness, KVB Finanz therefore recommends that married couples take out a loan together, ideally discussing this decision in advance. It is important to clarify whether both partners want to take out a loan for two and whether timely repayment is possible with the current household budget. The financial experts at KVB Finanz support the spouses in the decision and search for a suitable loan. They can offer helpful support with regard to the loan amount, the type of loan and taking into account the personal financial situation and finally also clarify whether a sole or a second borrower is cheaper. For example, in the case of a jointly concluded loan agreement, joint liability must be taken into account. If one partner takes out a loan alone, the other does not have to pay for his obligations. Joint liability only arises when both spouses sign the loan agreement or one vouches for the other. This means that both are responsible for repaying the loan and are jointly and severally liable to the bank for the full amount of the loan – even in the event of a separation or divorce.
Joint credit or guarantee: This is important to note
In principle, two parties can take out a loan regardless of their marital status, which means they do not necessarily have to be married. Relatives or friends can also apply for a loan together, but it is important that both partners are jointly and severally liable. It can therefore make sense for unmarried couples to conclude a notarized partnership agreement that regulates the amount of interest and repayment installments, for example. Both married couples and unmarried people should also clarify who is liable and to what extent for the repayment of the loan amount. Furthermore, in addition to the contract details, a few other things have to be arranged in advance. Both partners should clarify, for example, from whose account the installments will be debited. In addition, the death of a partner must be considered and, in the case of (married) couples, separation or divorce, for which protection or appropriate regulations must be found.
A decisive role is played here by whether a joint loan or the guarantee for a loan was taken out. If both partners have signed the loan agreement, the loan will initially continue as before after the separation, but within a year after the divorce there is the option of submitting an application for a default guarantee, so that only one spouse is the main debtor to the bank. In the case of a loan with a guarantor, in which one partner is liable for the liabilities of the other and a guarantee agreement is concluded with the bank, the guarantor is liable for the debts of the ex-partner even after the separation or divorce. However, a debt release can be agreed with the bank, with which the guarantee is lifted in the event of a separation. Debt relief can also be sought in the case of construction financing if both partners are entered in the land register as owners, but only one of them is the signatory of the loan agreement.
Take out a loan for two and plan the future together
Applying for and signing a loan together represents enormous financial relief for married couples. In order to be able to benefit from all the advantages, however, the partners are well advised to clarify in advance whether a loan for two is a suitable option and how this can best be used and can be implemented with foresight. When deciding on a joint loan and looking for a suitable financing concept, KVB Finanz is the competent contact. In a personal meeting, the financial professionals determine all the options and put together a tailor-made offer with the best conditions for married couples that takes their financial framework and common wishes into account. In this way, they can fully exploit the advantages of a loan that they take out as a couple and concentrate on their future together without any worries.
About KVB Finanz GmbH
Since it was founded more than 45 years ago, the Kloetzel family and KVB Finanz have primarily stood for finding the best financing concepts, individually tailored to the needs of their customers. For the traditional family business, their customers and personal contact with them are the absolute focus. Fair conditions, professionalism and a sense of responsibility are the top maxims. From families for families, KVB Finanz always thinks and acts in generations.
Press contact:
KVB financial services company mbH
Marc Kloetzel
Johannes-Mechtel-Str. 2
65549 Limburg/Lahn
Phone: 0 64 31 / 29 4 70
Telefax: 0 64 31 / 23 77 6
Email: [email protected]
https://www.kvb-finanz.de/
Original content from: KVB Finanz, transmitted by news aktuell
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