Moving in? Combine Your Debts with a Personal Loan

Combine your debts with a personal loan

Moving in with the partner is a huge step in any relationship. It’s a major milestone that not only signifies commitment but also a change in the dynamics of a relationship.  It calls for a great deal of emotional adjustments. But most importantly, it also requires smart financial planning. This may not sound all that romantic, but money can wreak havoc on any rosy relationship. In fact, financial disagreements have been a major reason for marriages ending in divorce, and for friction between unmarried couples. And this is also why you and your partner should chalk out the financial dos and don’ts of your relationship before moving in together. In case you both already have your own debts to pay off, you should also consider whether combining your debts with a personal loan can help.

Should you merge finances & combine debts with your partner?

This is a much-discussed topic, and understandably so because combining finances with your partner is a big step. It can have substantial legal implications and can impact both your credit scores. But on the contrary, it is also an opportunity to share the financial burden with your partner. It offers the means to build your relationship on a strong foundation of mutual trust and reliability. This, however, is possible only with careful planning and consideration. So if you and your partner wish to combine your finances and pay off your debts by consolidating them with a personal loan, here’s the right way to go about it:

Step 1-   Discuss with your partner.

You may wish to simply avoid talking about money with your partner. But dodging conversations about money will only hurt your relationship sooner or later. So have an honest and clear discussion about how you wish to handle finances, split bills, or pay-off loans. If you are thinking of taking out a personal loan to combine your partner’s debts with yours, don’t forget to mention it. Listen to your partner’s views with an open mind and be ready to consider them.   

Step 2- Understand the legalities involved.

Don’t rush into any decision, especially when it involves money. Carefully weigh all the pros and cons of consolidating both your debts with a combined personal loan. Get a clear picture of the legal implications involved in combining your debts. Carefully consider the impact this may have on your individual credit scores, and how you would be affected if you were to come out of the relationship.

Step 3- Consider a cohabitation agreement.

This is not a very romantic way to begin a live-in relationship. But, not having such an agreement isn’t exactly going to set your relationship up for success either. A cohabitation agreement is a way to make sure you and your partner are on the same page. This agreement typically outlines which one of you will pay bills and handle household expenses. It also explains how debts and assets will be handled in case of a break-up. If you and your partner decide to combine your debts with a personal loan, a cohabitation agreement is perhaps the best way to ensure smooth handling of finances in the future.   

Handling finances is stressful enough if you were to do it on your own. Bringing your partner into that equation can make it even more challenging. But on the flipside, uniting your financial commitments means fewer accounts to handle. Moreover, when you work together with your partner, it becomes easier to overcome challenges and achieve long-term financial goals. So whether it is about opting for a personal loan, or prioritizing debts and payments, make combined financial decisions with your partner. This is one way to give your relationship a rock-hard foundation!