Liability for joint loans surprises many couples: if you take out a loan together with your partner, you owe the bank the whole amount in case of doubt, not just half. This applies regardless of who spent the money and how you split the instalments between you. This guide explains joint and several liability (Gesamtschuld), shows typical set-ups and lists points to settle before you sign.
Short answer: If you both sign a loan as borrowers, each of you is liable as a joint and several debtor for the whole sum. Under Section 421 of the German Civil Code (BGB), the lender may freely choose whether to demand the performance from one debtor in full or only in part (as of November 2026). A break-up does not change this towards the bank.
Key points
- Joint borrowers are generally joint and several debtors: each owes the whole performance, but the lender may claim it only once.
- The bank decides whom to approach. It does not have to ask both first or split the sum.
- How you divide the instalment between you is an arrangement between the two of you and does not bind the bank.
- A break-up or moving out does not end liability towards the bank. That generally requires an agreement with the bank.
- A guarantor, or someone not in the contract at all, is liable differently. Check in which role you sign.
What does joint and several liability mean for a joint loan?
The German Civil Code describes joint and several liability in Section 421. Several persons owe a creditor a performance in such a way that each must provide the whole performance, but the creditor may demand it only once. The creditor may freely decide whether to demand the whole performance from one debtor or only part of it. As long as the performance has not been fully rendered, all debtors remain obliged.
Applied to a loan: if you both signed the loan agreement as borrowers, the bank can demand the entire outstanding balance from whichever partner is easier to reach or earns more when payments fail. The bank does not have to check who used the purchase. How far you owe each other compensation internally is a second question that you settle between yourselves and that does not bind the bank.
When am I a joint debtor and when not?
What counts is what the contract says and who signed it. Whether you are married is not the point for liability under the loan agreement. Unmarried couples are also liable as joint debtors if both are borrowers.
| Set-up | Liability towards the bank | What to watch |
|---|---|---|
| Both sign as borrowers | Joint and several: each is liable for the whole sum | Put your agreement on instalments and default in writing |
| One is borrower, the other a guarantor | The guarantor is liable under the terms of the guarantee, usually once the main debtor defaults | Check the scope and maximum amount of the guarantee in the contract |
| Only one signs, the other pays voluntarily | The bank can claim only against the contracting party | The payer has no rights against the bank, so keep your agreement and proof of payments |
| Joint instalment purchase, leasing, phone contract | Whoever signs is the debtor, with two signatures usually both | Ask before signing whether both names are on the contract |
What happens if one of you stops paying?
Worked example, assumption: you take out €12,000 together for a car, the instalment is €250 a month. Partner A pays €150, partner B €100. After a year B loses the job and stops paying. The bank can now demand the full €250 monthly instalment from A, because A is a joint debtor. A cannot rely on the internal split of 150 to 100 to cut the instalment towards the bank.
If A pays and B later finds work again, A may claim compensation from B internally. You must enforce that claim yourself, and it only helps if B can pay. For young couples with fluctuating income, for example during studies or at career start, the risk is therefore real.
What applies after a break-up?
The break-up does not change the contract with the bank. You both remain debtors, even if only one of you still drives the car or lives in the flat the loan was taken for. The way out goes through the bank: it can transfer the contract to one partner if that partner can carry the instalments alone and the bank agrees, or the loan is repaid early. Without the bank’s consent, joint liability stays. How to divide accounts and loans after a split is covered in Schulden nach der Trennung.
Does a joint loan affect other contracts?
An ongoing joint loan typically forms part of the creditworthiness of both debtors. Banks and landlords look at existing obligations when you apply for something new. Questions about information held on you go to the credit agency and the bank. Discuss before signing whether a loan is the right way to finance the planned purchase.
How do you protect yourself before signing?
- Read the contract to see whether you sign as borrower, co-borrower or guarantor.
- Calculate whether you could carry the instalment alone if your partner dropped out.
- Record in writing how you split the instalment and what happens if one of you can pay less.
- Ask the bank whether and under what conditions one of you can later be released from the contract.
- Consider alternatives: two separate contracts, a contract in one name only with a clear agreement, or a smaller amount.
- Keep contracts, proof of payment and agreements so you can show who paid what in a dispute.
If you manage money together, also decide how the account is run. The pros and cons are in Gemeinsames Konto in der Beziehung (in German). For the ongoing split of expenses, see Haushaltskasse zu zweit.
Does this apply to student loans?
Joint and several liability arises only if several persons sign the same loan agreement as debtors. A student loan usually runs in the name of the student alone. For differences between student loans, see Student loan comparison. How to restructure your own debts from your studies is a different topic and not covered here.
Frequently asked questions
Is my partner automatically liable for my debts if we live together?
No. Living together does not create liability for contracts that only one partner entered into. Liable is whoever co-signed the contract or committed as guarantor. Married couples may be subject to their own rules, described in the guide on marriage and divorce.
May the bank choose whom to approach?
Yes. Under Section 421 BGB, the creditor may freely decide whether to claim the performance from one joint debtor in full or in part.
Can I leave a joint loan?
Only with the bank’s consent. Typical routes are one partner taking over the contract or repayment through a new loan. The bank checks the creditworthiness of the partner taking over.
Do I have to pay if my partner stops paying?
As a joint debtor, yes: towards the bank you owe the whole instalment. Whether and how you can claim compensation from your partner is a separate question.
Does this also apply to unmarried couples?
Yes. The contract counts, not marital status. Both borrowers are liable as joint debtors, married or not.
How to proceed
- Before applying, clarify what you need the loan for and whether there are options without a joint contract.
- Read the contract and check your role: borrower, co-borrower or guarantor.
- Calculate the instalment for the case that your partner drops out.
- Put the internal split and the plan for a break-up in writing.
- If the situation is unclear, consult a lawyer or a debt counselling service. For questions about protection and cover, you can also use personal advice from Academycon, see How we work (in German).
Related guides
- Familie, Partnerschaft und Geld: Der Überblick für junge Erwachsene (in German)
- Schulden nach der Trennung: Konten und Kredite aufteilen (in German)
- Gemeinsames Konto in der Beziehung: Vorteile und Risiken (in German)
- Avoid Student Debt: Typical Traps and Ways Out
- Student loan comparison, criteria and rates 2026
Sources: Section 421 BGB, joint and several debtors (accessed November 2026).
Last updated: November 2026. This guide is general information, not individual advice.
