Having a partner pay off your debt can be incredibly tempting, especially if you’ve been together for a long time and the other person is quite well off.
Your debt of a few hundred or thousand pounds may not even register on the radar of someone who makes more than enough to manage it and still live comfortably.
If you’re married, engaged or planning to spend the rest of your lives together (and by proxy, plan to share your finances), it can also be very practical.
After all, if you want to buy a house together or make a similar, substantial purchase, your credit score could affect chances of getting a mortgage as a couple.
Then again, asking a partner to pay off your debt could cause friction in the relationship.
Even if everything is smooth sailing now and you couldn’t imagine being without each other, there’s always a possibility that they’ll bring it up in the future or make pointed remarks if you make any special purchases.
Should you one day break up or get divorced, they might also ask for the money back.
So, with that in mind, is it ever a good idea to let your significant other pay off your debt?
Should you let your partner pay off your debt?
Most experts agree that it could be very useful to have a partner share the debt burden or take care of it altogether if they are able to do so without implicating their own finances – but this is still a grey zone.
Dr Roger Gewolb, founder and executive chairman of FairMoney.com, tells Metro.co.uk that it is best to consider this transaction a loan, rather than a gift.
‘Yes – guaranteeing that you’re paying off a partner’s debt whilst you are not in jeopardy of putting yourself in debt, this could really improve your credit score and improve the profile of your personal finances,’ he says.
‘One thing to remember however is how both parties view this loan. It is a loan, it’ll be important to draft some sort of legal document so that you are both aware of the repayment structure.
‘You could potentially get away without paying any interest, although you would suffer from a lack of consumer protection. It would also be vital to include a provision that accounts for all eventualities of the future of the relationship.’
Meanwhile, Sam Jennings, founder of the financial management fir, Jennings & Co, explains that having a partner pay off your debt could be a viable, and much more suitable, option if you’re in so much debt that you’re considering taking out a second loan to pay off the first one.
‘If you’ve been open and honest with your partner about your “debt” and they have sufficient funds and are in a position to pay the debt off, then this is by far a better option that getting a further loan or turning to a loan shark,’ she says.
‘Often sharing the burden of a debt is the first step into recognising you have financial problems and are seeking help and mentally be a weight lifted from your mind.’
Whether you decide to let your partner help you financially or not, the important thing is to tell them about the debt.
Even if you want to manage it yourself, hiding substantial debt from a significant other is rarely a good idea as you could get ‘caught out’, which may end up damaging your relationship more than it would have, had you been honest from the get-go.
The more we talk about money and debt, the more we lessen the stigma around these delicate topics. Obviously, this doesn’t mean you have to tell everyone – but if you’re in a long-term, committed relationship, consider chatting to your partner about your debt.
The investment management service, Fidelity International, recently conducted a survey which revealed 86% of men and 85% of women would prefer to know about their partner’s debt, so that they can tackle this problem together.
The research also showed that men are more eager to help out with money (45%), compared to women (28%). It’s worth noting that gender pay gaps could be a factor, as in April this year, eight out of 10 companies still paid men a higher salary, compared to women.
‘If you are in a long-term relationship, it’s likely that you are already pooling your money together,’ Jamie Smith-Thompson, managing director of Portafina, tells Metro.co.uk.
‘Living by the mantra “what’s mine is yours and what’s yours is mine” naturally extends to your finances. And ultimately, debt falls within that too.
‘You have two choices. Continue to pool money together, in which case one partner’s earnings will naturally be attributed to the other’s debt.
‘Or, if your partner is unhappy to play a part in clearing the debt, look at how the relationship and finances would work if you revert to keeping your income separate.
‘Short term relationships are trickier. While you may be in the rose-tinted bubble of the honeymoon period, at this stage in your relationship, there’s less of a commitment to each other. And this carries more risk of financial fall out.
‘As the partner not in debt it is vital that you protect yourself.
‘While you might feel like you want to help, there should be no pressure to do so. If you do choose to help, a legally binding agreement signed by both parties should be put in place.’
What to think about before offering to pay off someone’s debt
If you are the person offering to pay off the debt, there are a few things to consider before you agree:
- Will you be able to comfortably pay it off without any negative repercussions to your own finances? If the answer is no, don’t do it.
- Get the full view of your partner’s finances; ask them to lay out the complete debt and how they got into debt, so you can assess whether this is a one-off or will happen again.
- Be supportive and kind, even if you decide to say no – this is still someone you love, and they are likely already feeling embarrassed about the situation.
- Depending on the size of the debt, consider getting a legally binding document so that if you do break up, the debt won’t fall to you to manage (if you make monthly repayments, for instance).
- Consider making it a loan, instead of a gift, with a payment plan set up (if suitable).
- Look at your credit rating and find out how this may or may not affect it.
- If you do pay it off, don’t gloat or use it as ammunition in heated arguments.
If you’re splitting something financially, it’s always a good idea to have a legal document stating how much each of you owe and/or will pay back – for example, if you get a credit card together.
If you have a joint credit agreement, and your partner racks up thousands in debt on the card, then you are also both liable to pay it off, according to Money.co.uk.
In other words, be cautious before sharing finances with someone else.
Although majority of women and men would happily pitch in for their partner’s debt, some claimed they would only do so once – at 21% and 16% respectively.
This is also another reason to consider before going through with a loan or payment; why was your partner in debt to begin with?
Was it to pay off bills? Was it accidental? Or was it due to an addiction of some kind? If it’s the latter, and you fear they might get into debt again, offering cash isn’t a great solution.
If you are the one in debt, tell your partner the full truth and ask them to support you with the root of the problem or seek help yourself, so you don’t find yourself in a similar situation going forward.
‘The key is to avoid resentment within the relationship,’ says Jamie.
‘Be open and honest with one another and explore all the different options available to you as a couple. There are many reasons why people get into debt, and your partner may need support if they are experiencing difficulties.
‘This could mean talking to the bank, taking advice from a debt counsellor, or even speaking to a solicitor.’
Being in debt can be incredibly stressful, and while a quick fix like having someone else pay it off could be a good way to solve your money problems, it may also affect your mental health going forward.
If it’s a loan, the partner becomes a lender – and it could change the dynamic of a relationship or even make the debtor feel bad about themselves (for ‘failing’ to pay off the debt on your own).
Go into this with open eyes, talk about possible outcomes and don’t rush into making a decision.
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