Why do I have to have joint applicants for the arrangement loan?


In most cases, the debt settlement loan must have at least one joint and several applicant in addition to the debtor. The jointly and severally liable parties are responsible for ensuring that the loan is repaid in accordance with the plan.

Solidarity provides the debtor with security

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From the lender’s point of view, the purpose of joint and several liability is to secure the repayment of the loan. Solidarity provides the debtor with security – in case of payment difficulties, someone else is also responsible for paying off the arrangement loan.

Solidarity is an important person for managing the financial situation. Therefore, no one is a good solidary borrower or an applicant; instead, it is worth asking for someone who can put their own financial situation in their hands.

Who is fit for solidarity?

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Often, the spouse, parents or siblings are jointly and severally liable. However, parental assistance is limited in that the consolidation loan must be repaid before the age of 75 years for joint and several liability. If your parents are older, your adult siblings, for example, can be helpful.

It is good for solidarity to be someone who can be openly told about their own financial situation even in difficult times. Solidarity learns the state of your finances when applying for a loan and is also told how much debt the mortgage is going to consolidate. He will also be informed if there are any delays in paying down the loan.

The joint and several liability credit must have a clean credit history and he or she must be permanently resident in Finland.

Considering solidarity is worth considering

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Solidarity is, as its name implies, responsible for repaying the arrangement loan and is responsible for ensuring that the monthly installments are also paid on time. The loan is also reflected in his debt information, thus also affecting the acquisition of joint and several debt. For example, if you are considering purchasing a mortgage in the future, you might want to consider how jointly and severally liable debt may affect the availability of the loan.

Therefore, before deciding, the solidary should add up his monthly income and assess whether, in a potentially unexpected situation, he would be able to take the repayment of the excess loan as an additional burden on his economy.

The solidary shall have an annual income of at least USD 20,000 and shall, after a monthly installment of the solidary debt, have a reasonable margin in the event of payment being made to him.