A financial agreement where two or more individuals jointly obtain credit, pledging an asset as collateral to guarantee repayment. This arrangement allows multiple parties to access funds, leveraging a single secured asset. For example, siblings might jointly take out a loan against the equity in their inherited property to fund business ventures.
This collaborative borrowing approach can facilitate access to larger sums of money than might be attainable individually. It enables risk and responsibility sharing among borrowers, potentially leading to more favorable loan terms and increased financial flexibility. Such arrangements have existed for decades, often evolving in response to community lending practices and collaborative investment initiatives.
