Cold expansion of fastener holes is a recognized technique for enhancing the fatigue life of holed plates utilized in detachable joints. This method involves introducing compressive residual stress around the holes, which has proven to be effective in improving the structural integrity and longevity of such components. In this research, the role of using different plasticity models in finite-element simulations of cold expansion (CE) in determining residual stress distribution and predicting the fatigue life of lap joints was investigated. Finite-element simulations were conducted to analyze the distribution of residual stress in cold-expanded Al-alloy 2024-T3 plates utilized in double-shear lap joints. Three time-independent plasticity models, specifically multilinear kinematic hardening, multilinear isotropic hardening (M.L.I.H) based on monotonic tensile tests, and nonlinear combined hardening models derived from saturated hysteresis stress and strain loops, were employed in the simulations. These models allowed for an accurate determination of the residual stress distribution in the plates. In finite-element simulations, two CE sizes of 1.5% and 4.7% were employed to create residual stresses. In the simulations, after creating residual stress by CE, remote sinusoidal loads are applied to the joints corresponding to the previously conducted fatigue tests in order to obtain stress and mechanical strain distributions. In order to predict the fatigue life, four different multiaxial fatigue criteria (Smith–Watson–Topper, Glinka, Kandil–Brown–Miller, and Fatemi–Socie) were employed, using the stress and strain distributions obtained from the finite element simulations with the different plasticity models. The simulations yielded varying stress and strain distribution results for the multilinear kinematic and M.L.I.H models, while the results of the nonlinear combined hardening model fell between the other two models. Notably, the fatigue life prediction based on the nonlinear combined hardening plasticity model closely matched the experimentally observed fatigue lives, with an absolute percentage deviation of 24.8%.