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Yes – it is possible to borrow money on someone else’s behalf but you will have to do all of the background and credit checks and applications under your own name. Once the loan has been approved and in your bank account then you can send that money to your relative.

This is risky because you will then be liable for the loan, not your relative’s. You should always try to have your relative or friend apply for themselves as then they will be liable for making repayments.

If a close relative or friend asks you to take out a loan, then doesn’t repay you in full, you’ll have to pay that money back. This could put you in a tricky situation both with the lender, but also with your friends and family. This can damage relationships and destroy credit ratings. You should think about this carefully before deciding to apply.

Key Points For Borrowing On Behalf Of A Relative

  • You can take out a loan on a relative’s behalf but it has to be in your name. You cannot apply using someone else’s details
  • All of the risks are in your name. If your relative does not pay you back then it is your credit rating and finances that could be damaged
  • You can co-sign for a loan with a relative – this puts the risk in both of your names. If your relative defaults, you will still be liable to pay back the loan
  • 21% of Americans have cosigned for a loan
  • 35% of Americans have helped a relative financially

Why Would A Relative Ask Me To Apply For A Loan For Them?

There are a number of situations where a relative or close friend might ask you to apply for a loan on their behalf. It could be credit rating, existing loans or they could be out of work. Let’s dig into these further.

If you have built your credit score up over a number of years you might have a strong rating compared to a family member. With a good credit rating, you will get preferential rates in both interest and repayment terms. If your relative has very bad credit then they might want you to apply for a loan to take advantage of the lower amount of interest they have to pay. The risk is that if they don’t repay then your credit rating could also be damaged.

To apply for a payday loan you must be a US resident – this is one of the key eligibility checks required by lenders. Your relative might not be able to apply if they are not yet a US citizen. They might ask you to apply on their behalf because they are not eligible.

It could also be because your relative already has outstanding loans. In some states, you can only have one outstanding loan at a time. The rules and regulations for payday loans change depending on where you live and so it is worth reading into it before you apply.

Just because you have borrowed money for them doesn’t mean that they will pay you back. It’s risky when you apply under your own name but don’t have control of the repayments.

Can I Apply For A Payday Loan For Another Person?

Yes – you can borrow money online for someone else but it is important to remember that the loan will still be in your name. If your relative or friend fails to repay you for the loan, then you are eligible. Loans can have very high APRs and so it can quickly become expensive if you don’t make the initial repayments. If you get a loan for someone else then you should make sure that you can afford to pay it back in full.

It is crucial to remember that you are responsible for the loan. Even if you put an agreement in place saying that you are taking out the loan for someone else, the lender will not care. They will come after you to get repayments.

You’ll also have to deal with all the admin of the loan – making repayments, credit checks, and making sure that it is paid off in full.

Is It Illegal To Get A Payday Loan For A Friend?

No – it is not illegal to apply for a payday loan for a friend or family member. However, you cannot apply using their details because lenders will check on this. You will have to apply for the payday loan in your own name and take full responsibility for the loan.

Even if you are taking out the money for someone else you will still be liable for repayments. If you do take out money for someone else then be aware that if they can’t pay you back then you will have to pay back the lender in full.


It can be difficult to say no to family and friends but think carefully before taking out a loan on their behalf.

Is It Risky To Take Out A Loan For Someone Else?

Even though you are taking out the money for someone else, it is still you who is responsible for paying it back. It is your name, it is your credit history, and your bank account that is listed on the application form. Therefore the lender has made an agreement with you, not the person who ends up with the money.

This makes it very risky for you because you have no control over whether this money can be repaid. You might even have to dip into your savings to pay back the loan if your friend or relative defaults on the payment.

You should set up a system that means they send you the money each month so that you can cover the payments. Otherwise, you could be in trouble.

What If I Don’t Want To Apply For A Loan For Someone Else?

If you don’t want to apply for a payday loan for a friend then there are some other options. One of these options is to lend the money to the person yourself. This is actually a less risky option because even if the person doesn’t pay you back, you won’t have to pay interest to the loan company and risk having your credit rating damaged.

It is still risky because they might default on their repayments to you, but definitely less risky.

Another option is to just say no. No, I don’t want to apply for a loan on your behalf, you’ll have to find another option. This can be difficult because money is a very emotive subject, especially when borrowing from family and friends.

A final option we’d share is that you could tell your relative to ask for financial assistance from where they work. There are payday advances available from some employers, especially if you have worked there for a long period of time.

Richard Allan

Richard Allan

Richard Allan is the founder of Capital Bean and a passionate writer about personal finance, budgeting and how to save money at home and work.

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