No Joint Application On Unsecured Loans?

Lately we have received many questions regarding this issue. People wonder why nobody talks about joint application on unsecured loans. These questions are probably the consequence of confusing joint applications with the applications that are co-signed by a third party. Actually, the reason why nobody talks about joint applications on unsecured loans has to do with the nature of unsecured loans and with the nature of joint applications.When you apply for a car loan or a home loan, you can apply jointly with your spouse or a friend (or almost anyone for that matter). That same person could just co-sign the loan instead of applying jointly. But with unsecured loans, the only option if you need someone to aid you with the application, is to request them to co-sign the unsecured loan contract. Let’s analyze why:The Title And Right Of PropertyJoint applications are possible when the purpose of the loan is to purchase a vehicle or real estate property that will be securing the loan. This is due to the fact that the property or vehicle will be jointly owned by both parties and thus, the title and the right of property will be in head of both of the applicants. So, when applying jointly both borrowers are covered by the terms of the contract in full along with other related contracts like insurance, etc.Personal unsecured loans carry no collateral at all due to their nature and thus, cannot be jointly applied for. However, if you need to get aid in order to qualify for a particular personal unsecured loan, you can request a co-signer for help. The co-signer will be obliged to the loan repayment just like the main borrower, but the main applicant is still also the main debtor till the loan is fully paid off.When you apply jointly you are legally responsible for making the payments on the loan just like with co-signing but you have ownership rights to the property or vehicle, your name is on the title of property, you can seize the asset, request the payment of insurance, demand the responsible for damages, etc. Joint Applications are definitely a more secure position than merely co-signing but on unsecured loans, there is no asset to be used for this purpose.Risks of Co-Signing On Unsecured LoansCorrelatively, co-signing a loan has its perils. The co-signer has to take the main borrowers place if at any time he fails to make the monthly payments on the loan. Thus, he acts as a guarantor of the loan repayment which means that at some point, the lender’s decision to approve the loan was made because the co-signer proved to be trustworthy and the main borrower couldn’t have obtained the loan otherwise.However, the co-signer will have to suffer on his assets any claim made by the lender. This is due to the fact that in most cases, the lender is entitled to take legal action against any of the borrowers in order to collect his money. The co-signer will have to pay and only after paying he can repeat the legal action against the main borrower to recover what he had to hand over to the lender.