Becoming a borrower

Some things to consider before becoming a borrower.

Borrowing money, whether on your own or with someone else, is a significant financial decision. This guide outlines some of the things to consider before taking out a loan.

While it’s designed to help you make more informed choices to help protect your financial wellbeing, we encourage you to obtain independent legal and financial advice and to seek help if you feel any pressure to enter into the loan.

Here are some things to consider before becoming a borrower

• Do I fully understand the loan terms, including interest, fees, and repayments?
• Do I receive a substantial benefit from the loan (eg. A reasonably proportionate interest in the property purchased with the loan funds)?
• Do I understand the difference between a co-borrower and a guarantor?
• Do I feel any pressure to enter the loan?
• Have I considered how the loan will impact my overall finances?
• Have I sought independent financial or legal advice regarding the loan?

Your legal and financial responsibility

When you apply for a loan, you take on a legal commitment to repay the full loan amount, along with any interest and fees. This applies whether you’re the sole borrower or jointly borrowing with others.

• As a sole borrower, you are solely responsible for repaying the loan.
• Co-borrowers are jointly and severally liable - this means each borrower is liable for the entire outstanding amount, regardless of whether your co-borrower is able to pay.

What are the differences between a co-borrower and a guarantor?

• If you’re unsure about your potential responsibilities under a loan or the impact of taking out a loan, we encourage you seek independent legal and financial advice before signing.
• If you feel pressured to become a co-borrower, please speak to your Home Lending Specialist or Broker as soon as possible. At ANZ, there are ways we can help if you’re impacted by family violence or financial abuse. Visit our website for more information Family violence and financial abuse
• Carefully consider why you are proposing to take out the loan and whether the loan meets your needs, objectives and circumstances . Think about how the loan could affect you in the event of relationship changes, financial stress, or a change in living arrangements.

There are some very important differences, and we’ve outlined some of them in the table below. 

Understanding the purpose and benefit of the loan

Under the Banking Code of Practice, we need to consider whether you will receive ‘substantial benefit’ from the loan.

‘Substantial benefit’ means that you, as the borrower, will gain a meaningful and real benefit from the loan.

Examples of a substantial benefit:

• A couple takes out a loan together to buy a home they will live in
• Taking out a loan to purchase a vehicle that you will own and drive

Examples of limited or no benefit:

• Taking out a loan as a co-borrower to help your child purchase a home – but you will neither own it or live in it.
• You take out a loan in your name only, to help your partner pay for their debts.

Ask yourself: Will I get a real and material benefit from the loan?

If, on the information that you have provided to us in the course of applying for the loan, you will not receive a substantial benefit from the loan, we will not approve you as a co-borrower unless we:

1. have taken reasonable steps to ensure that you understand the risks associated with entering into the loan, and understand the difference between being a co-borrower and a guarantor; 
2. have taken into account the reasons why you want to be a co-borrower; and 
3. are satisfied that you are not experiencing financial abuse

Some key risks of borrowing

Borrowing comes with real risks, and it’s important to go in with your eyes open:

• You are legally obligated to repay the loan
• If the loan is secured (e.g. by your home), you could lose that asset if you default on the loan
• Your loan will affect your credit score and may limit your ability to borrow in the future.
• Missed repayments can lead to legal action, fees, and long-term financial stress.

We’re here to help

If you have any questions, please reach out to your ANZ lending specialist or broker directly.

We can organise an interpreter if you need one, including an Auslan interpreter. We can also support calls using the National Relay Service. 


This information is general in nature, does not take into account your personal objectives, financial situation or needs and you should consider whether it is appropriate for you.  Consider obtaining independent professional financial and legal advice and read the relevant terms and conditions, Product Disclosure Statement and the ANZ Financial Services Guide (PDF) before acquiring any product.  Applications for credit subject to approval. Terms and conditions & fees and charges apply.  Australian credit licence 234527.