There is usually nothing to prevent a loan for unmarried couples. However, if a larger purchase is made or a property is even to be bought, many banks are skeptical about the project. Financial institutions and banks want to finance safely. With regard to liability in the event of separation or death, the situation can be more difficult than for married couples.
The financial situation should be clarified before financing
If a loan is needed for larger purchases, banks like to see two salaries available to secure the borrowed money. With sufficient creditworthiness and positive Credit bureau information, there is nothing standing in the way of a high credit for unmarried couples. In the case of real estate financing, however, the ownership structure should be clarified in advance. A notarized partnership agreement can clarify the ownership structure in the event of the death or separation of a partner.
Without a contract, the liability and claim situation is clear. Only those who are entered in the land register can be held liable. The same applies to the claims. A life partner who is not registered in the land register also has no claims to property. It is also completely irrelevant whether and how much capital has been invested.
Couples are jointly and severally liable for a joint loan
If unmarried couples take out a cash loan together, they are liable like a partnership. In the case of a loan for unmarried couples, the individual life partners are jointly and severally liable. In the event of death or insolvency of the applicant, the co-applicant will be used to pay the remaining debts. If couples split up in the dispute and a contract partner does not pay, the applicant or co-applicant must also pay for the remaining debts. This rule is particularly bad for the liable partner if a loan has been taken out for a property and there is no entry in the land register.
Unmarried couples should find out before borrowing
Before a loan is taken out for unmarried couples, life partners should seek expert advice. Lawyers as well as bank advisors are very familiar with the legal provisions and can contribute to a joint solution with their advice. This is especially important if larger purchases have to be financed jointly or if a property is financed through a loan. With a jointly concluded partnership contract and the entry of both contract partners in the land register, possible inheritance disputes can also be clarified in advance.