In the case of a loan without a co-applicant,
The borrower acts as the sole recipient of the loan vis-à-vis the borrower. As a result, he is primarily responsible for repaying the loan amount and interest to the bank. If several co-applicants take out a loan, the bank can virtually decide from which borrower to demand the repayment, which is usually carried out in solidarity. In the case of a loan without a co-applicant, on the other hand, the borrower appears alone, which means that he also takes the entire loan amount.
However, a co-applicant should not be confused with a guarantor, because while both are equally liable for the debt resulting from a loan, the guarantor himself has no right to receive the loan amount proportionately. For this reason, a guarantee is also associated with a significantly higher risk, and the guarantee is often chosen if the actual borrower is unable to obtain a loan independently due to poor creditworthiness.
Co-applicants, on the other hand, are often business partners or spouses who want to take out a loan for a larger investment and also want to repay it in solidarity. Both parties usually have at least a sufficient credit rating so that both people would also receive a loan independently. The combination with a co-applicant, on the other hand, also allows higher-end loans with shorter terms to be taken out.
Clarify the situation in advance
If you want to take out a loan without a co-applicant, you should be very sure that you can serve the lender in full and on time. In contrast to loans with other borrowers, the recipient of the loan amount for the loan without a co-applicant is entirely on his own, which is why no joint and several liability is possible. However, the borrower can still use a guarantor to secure the repayments and to increase the creditworthiness, provided that at least there is a person in the closer environment who is financially capable and willingly bears the resulting risk.
If this is not the case, the bank can only prosecute the borrower if there is no payment. These would then result in high reminder costs, which, in the worst case, could even result in bankruptcy in the event of a further delay. Therefore, borrowing should always be considered carefully, although people with a regular employment relationship and at least average income naturally pose a low risk of default. Individuals who do not have sufficient creditworthiness can specifically increase this through a co-applicant, whereby this additional borrower always has a share in the loan amount. The guarantee would be a more sensible solution in this case.