Regardless of whether you have a marriage license or not, if you share your household, you save money. The expenses – be it for household appliances, subscriptions, telephone, electricity or gas – are shared between two people, which significantly reduces the burden on each individual. Some insurance policies, such as liability, household contents or legal protection, can also be taken out together and the costs can then be shared.
Married people are in a much better position when it comes to tax returns: if they file jointly, the splitting tariff applies to them. However, this only has a particularly beneficial effect when one partner earns significantly more than the other. If a single earner receives a taxable annual income of 60,000 euros, the tax advantage is around 6,000 euros. Spousal splitting has no effect if both partners earn the same amount. Then the savings are zero.
While most couples look specifically for savings potential in a wide variety of areas and then make the most of it, there is one area where they often fail to do so: financing. Fewer and fewer people are able to avoid a loan when making larger purchases. Whether it’s a car, a fitted kitchen or a photovoltaic system – they are all usually bought on credit. Statistics prove this: At the end of 2022, the total amount of loans granted to private individuals in Germany amounted to around 1.5 trillion euros. Twenty years ago things were different: the amount of loans granted to private individuals was 949.5 billion euros.
What is striking is that, as in previous years, a clear majority, namely 80 percent, of married couples in Germany took out a loan as individuals in 2023. This is shown by a current analysis from Check24. Maybe out of ignorance? Because if you finance it alone, you pay a lot more. Not only that higher interest rates are due. Individual borrowers also receive worse conditions. Those who finance together, on the other hand, have a clear advantage, says Stefan Eckhardt, Managing Director of Loans at Check24, and explains: “Banks often offer better interest rates for loans for two people and borrowers are more likely to receive the bank’s approval.”
The expert calculates: In 2023, individuals will pay an average annual interest rate of 6.44 percent for a loan of 20,000 euros with a term of 84 months. On average, only 5.67 percent is due for a jointly taken out loan with the same loan amount and term. As a result, couples save twelve percent on the effective annual interest rate and reduce interest costs by 586 euros per year.
Even with smaller loan amounts, it makes a clear difference whether you finance alone or with two people. This year, for a loan amount of 10,000 euros, the interest fell by eleven percent, and the interest costs fell by 279 euros. Eckhardt explains why this is: “A bank with two borrowers has a lower risk of default because both parties are jointly and severally liable.” This means not only better interest rates, but also higher loan amounts are possible. In addition, the chance that the loan will be approved at all also increases.
Another reason why banks prefer couples: “An additional person increases the security for banks that the borrowed amount will be repaid on time,” says Eckhardt. At the same time, he advises couples to be careful: a second borrower is not always an advantage, for example if it does not increase your creditworthiness. This can be the case, for example, if the second applicant has a temporary employment contract, is older than 65 or the monthly income is too low. Then it makes sense not to take out the loan together. “When granting loans, the creditworthiness of the borrower is the decisive factor for the bank,” explains the credit expert.
Even if many things seem certain, many things come unexpectedly: unemployment, illness or separation. Anyone who wants to finance together should consider these aspects. Eckhardt shows the consequences: In the event of default, both borrowers are liable for the full amount of the loan with the part of their income that can be seized. “It doesn’t matter whether they are married couples, relatives or friends,” he explains. In the event of a separation, the joint loan could be rescheduled to an individual. This is possible without additional costs if a free special repayment has been agreed with the old bank. If this is not the case, the bank can demand a capped early repayment penalty. “If there are still more than twelve installments of the old loan outstanding, the fee may be a maximum of 1.0 percent of the amount repaid earlier – if there are twelve or fewer installments still outstanding, a maximum of 0.5 percent,” says the expert.
This article first appeared here in the business magazine “Capital”, which, like stern, is part of RTL Deutschland.
