Can I Apply For a Loan On Behalf Of Someone Else?

Typically no, you should only apply for a loan that is intended for you and uses your own personal details including your address, employment and bank account details. There are exceptions where you can apply for a loan on behalf of someone else if they have accessibility and usability issues or if you have power of attorney of their finances.

You may want to take out a loan on behalf of a parent, spouse, relative or friend. This may be possible if you have their permission and a clear understanding of who is going to be responsible for repaying the loan. However, lenders use a series of sophisticated checks and can often tell if you are trying to use another borrower’s name in order to get a loan for yourself.

We look through some key points surrounding whether you can take out loans on behalf of another person.

Why Can’t You Apply For a Loan For Somebody Else?

Using someone else’s name and details to take out a loan without their permission can be illegal.

If you are applying on behalf of someone else, it is likely to get flagged by the lender and make your loan application void.

When you apply for a personal loan, payday loan or credit card, the lender will carry out a series of automated checks and credit checks and this will cross-reference your name against your date of birth, home address and bank account details.

So if you are trying to apply with partly your details and someone else’s details, this will likely be noticed by the lender and your loan application will be declined and reported to the credit reference agencies.

Down the line, there may be more drastic legal implications if repayment is due or not repaid. This could create friction and legal action between you and the other party.

Under What Circumstances Can You Apply For a Loan For Somebody Else?

Usability/Accessibility – If you are applying on behalf of a parent or relative that has usability and accessibility issues and cannot use a computer or phone, this would be perfectly valid to apply for a loan on their behalf if you have their full permission. Often people have carers or family members to help with finances and this could be perfectly acceptable.

Joint Applications – There are certain loans that fall under joint loans where two parties can come together and borrow money. This might be for joint accounts, credit cards, personal loans and mortgages. However, signatures from both parties are usually required.

Guarantor Loans – Guarantor loans allow you to co-sign a loan agreement and share the responsibility of repayment. If you are struggling or know someone is who struggling to get a loan, you can be a guarantor for them – and agree to cover repayments on their behalf. This can help young people and those with bad credit to access finance, but it is also important to know the risks and understand that a co-signer is also viable for full repayment.

Power of Attorney – If you have full power of attorney over another individual, you may be able to make financial decisions on their behalf and this includes applying for loans. This may be due to old age, poor physical or mental health. Importantly, to make this decision, you will be making the call that a loan is the best thing for them. Just remember that they will be responsible for any outstanding repayments.

There are financial products where spouses and family members can borrow money together.

What Things Do Lenders Look For?

During the underwriting process, lenders will be carrying out checks to ensure they know who they are giving their loans to – and if they are unsure about this, the loan will be not approved. By giving your own details and being fully honest will only help your loan application go through as smoothly as possible.

There are certain things that lenders look for such as:

• Your name matches your email address and home address
• Your name matches your bank account records
• A payslip that matches your name, income, employment and work dates
• You answer the phone when called to run through some checks

Related Guides

What is Underwriting?

What To Consider Before You Apply For a Loan

What Does Subject To Status Mean?