The loan with guarantee is demanded more and more by the banks. If a guarantor can not be brought, either the interest rates rise significantly, but in many cases even the loan application is rejected. The article deals with the background and facts of this development and also shows alternatives.
The loan with guarantee – if others have to cling.
For the credit to prove the guarantee of a friend or partner, which is increasingly required by the banks. This development is due to the tightening of credit on repayment security. As part of the banking security measures, the requirements for loans have been tightened extremely. However, these measures, which are intended to protect investors, have far-reaching consequences for borrowers and guarantors.
The guarantee for smaller sums, which everyone can pay off in case of need, at least does not lead to a permanent emergency situation of the guarantor. Even in the case of liability – though it may be annoying – the existence of the guarantor is not threatened.
It is different with guarantees for the loans of an entrepreneur. Especially smaller companies are heavily subject to market fluctuations. The instrument of separation of property has been introduced for the sole purpose of not having the entire family in a business failure. The guarantee of the wife will undermine this protection.
The guarantee – to secure credit benefits.
Guarantees do not just have negative sides. For the borrower, the guarantee of a solvent sponsor can bring significant benefits. An own creditworthiness can be compensated over the guarantor. Loans, even in a financially strained situation, are made possible again by the guarantor. Significant interest rate advantages can also be achieved through additional security. Every lender wants to invest his capital safely. He also likes to forego higher interest rates.
However, anyone who lets a guarantor take care of himself should also be aware of his responsibility. If the debtor does not pay, then the guarantor is liable. As part of this responsibility, every person seeking credit should try to avoid a guarantee. Other collateral, such as life insurance, can often replace the guarantee requested by the bank.
Loans that do not require guarantors.
The loan with guarantee is in the context of small loans – up to 3000, – $ – rather uncommon. With such small loan amounts often even a comprehensive examination procedure is dispensed with. The situation is similar with department store loans. These loans granted for the purpose of promotion usually only depend on the income earned by the applicant and the Credit bureau information.
The most common loans without guarantors are the discretionary credit and the overdraft on the credit card. Unfortunately, the loan with guarantee can not always be avoided, but it should only be used responsibly.