A joint debt consolidation loan might be okay when you and your partner are juggling separate bills every month. It rolls all your separate credit cards, loans and overdrafts into one single monthly payment, almost always for a lower overall rate.
The second you both sign that agreement, each of you is responsible for the full amount. If you break up next week, that debt does not get split, it does not get cancelled, and it does not go away. The lender cares about the repayments. If one of you stops paying, both of your credit scores will be ruined.
There is no 50/50. This is a lie you tell each other. This is not what the contract says. The law does not care what you agreed between yourselves. It does not care who spent the money.
The rule that applies here is called joint and several liability. Each single one of you owes 100% of the full debt. The lender can come after either one of you, or both of you, for every last penny.
This is true for every single joint loan, but if you took out a debt consolidation loan from a direct lender. Then, direct lenders do not get involved in relationship disputes. They do not take sides. They only care about getting the money they are owed, as agreed on the day you signed. There is no room for negotiation or explanation on this point.
Once you have accepted that no one is coming to save you from this debt, you have options.
It is also often the hardest one emotionally. You do not have to speak to each other about anything other than this loan. You can set up a single standing order from a separate joint account that you only use for this payment.
You can agree to split the amount however you feel fair. You should get every part of that agreement in writing, even if it feels stupid and cold. You should keep a screenshot of every single payment you ever make.
If one of you agrees to take on the full payments, absolutely nothing changes on the original contract. Both of you are still fully liable. The person paying is completely exposed if their ex decides to run off and leave them with it.
The person not paying is exposed if their ex misses a payment out of spite. Any agreement you make between the two of you is not worth the paper it is written on as far as the lender is concerned.
This is the only proper way to get someone off the loan. One of you applies for a new loan on their own, uses it to pay off the full joint balance, and the original agreement is closed. This removes all liability from the other person permanently.
This is almost always the fastest route if you get a debt consolidation loan from direct lender. They can usually process and settle the original loan within 7 working days. This avoids the long gaps and delays.
You can use savings, sell a car, sell furniture, or release equity from a property if you own one together. You may have to pay an early repayment fee, so you should check the original loan terms first. This is better than spending the next five years tied to someone you no longer speak to.
You can split the balance between you and pay off the full joint loan if you can both qualify for separate 0% balance transfer cards. You have to make sure the original loan is closed completely. Watch closely for transfer fees, and make sure you can clear the full balance before the 0% period ends.
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Cost Breakdown – Breaking Free From Joint Debt |
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|
Method |
Typical Costs |
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Early repayment from savings |
Early repayment charge 1-5% of balance |
|
Refinance in one name |
Arrangement fee £100-£500 + early repayment 1-5% + possible higher interest |
|
Keep paying jointly |
No upfront cost |
|
Balance transfer to separate cards |
2-4% transfer fee per card |
|
Debt management plan |
Free with charities |
|
Legal action against ex |
Solicitor fees, court fees |
If your ex stops paying, you will have to pay the full amount. The lender will not chase them. They will not split the arrears. One missed payment will appear on your credit file. Three missed payments will stay there for six years.
You can take your ex to court to get the money back. You can use the small claims court for any amount under £10000. For larger amounts, you will need a solicitor. This process is slow, expensive, and stressful. There is absolutely no guarantee you will ever get a single penny back.
No couple wants to talk about breaking up when everything is good. This is exactly the right time to talk about it.
Do not borrow any amount that you both cannot afford to pay entirely on your own. If the loan would be unaffordable on one income, you should not take it out. This will save you from almost every possible bad outcome.
Agree exactly what will happen if you break up, and write it down. It does not have to be a formal legal document. It just has to be something you both sign and date. Put three months’ worth of payments aside in a separate emergency account that you both can access. Check the loan statement together every single month. Keep a copy of every single document somewhere that you can both get to.
You can take out loan protection insurance if you want, but it will only cover payments for a fixed period of time.
There is nothing wrong with taking out a joint consolidation loan. It only becomes a mistake when you pretend that nothing can ever go wrong.
You do not have to distrust your partner to be sensible about this. You just have to accept that no relationship is guaranteed. Never borrow more than you could afford to pay back on your own. Never take anyone’s word for it that they will keep paying if you split up.
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