Loan with guarantor

How do I get a loan today?

If you want to take out a loan, the bank usually asks for certain collateral. Especially in cases where incomes are rather low, further collateral must be provided for the bank. This can be your own home, for example. The bank would then be able to auction the house if the loan can not be repaid. Of course, not everyone who needs a loan has their own property. But even in these cases, there are ways you can get a loan.


What type of loan is the so-called “loan with guarantor”?

Especially if you do not have a high income, the bank sometimes demands that another person agree to be liable for a loan. Ideally, of course, this is a person with high income and good liquidity. The lender can hold onto this person if you can not repay a loan. It is therefore a matter of trust whether you advocate for someone as a guarantor. This should only be done if you know a person very well and have confidence in it.

There are also different types of guarantee. There are guarantors who only step in if the borrower can not repay a loan. In other cases, the bank may choose for itself whether to prefer the borrower or the guarantor.

Of course, if the guarantor has more money, she will contact her. It is therefore very important to consider whether you should step in for someone else as a guarantor.


Find suitable guarantor

As a rule, this happens in the family or circle of friends. But there are also cases in which an employer takes a job for one employee. A healthy entrepreneur will certainly find it relatively easy to step in for a manageable loan. However, the employer will only do that if he is very satisfied with an employee and wants to do him a favor.

You can definitely try to get your employer to do it. If you have a solvent sponsor, you can in many cases take out a loan with lower interest rates . You then realize that you have to pay lower rates. Overall, you have less cost than taking a loan without a guarantor.


Benefit from low interest rates

Especially when it comes to a larger borrowing, as for the purchase of a property, lower interest rates can pay off very well. The problem with the loan with guarantors is to find a guarantor. After all, you do not want stress to be within the family because of a loan or break friendships. That’s what you should think about when you need a guarantor for a loan.

First and foremost, you must be careful to repay the loan yourself. The guarantor should really have to step in only in exceptional cases .


Credit despite bad credit rating thanks to a guarantor – The choice of the “optimal” guarantor

In order to get a loan, it is necessary that a potential borrower can prove collateral to the lender. This can include savings, high regular income, real estate and expensive jewelry. As a result of this procedure, banks and credit institutions protect themselves from financial disadvantages that arise because the borrower does not or only partly service the repayment installments together with interest.

If credit seekers have a bad credit rating, for example, are highly indebted or unemployed or are still in training, a guarantor can prove his collateral representative, so that the possible borrower can still get the loan despite a bad credit rating.

Most borrowers choose guarantors from their close family or friends. Since for many people “the friendship ends with money” should be available for such a relationship with a lot of trust and both parties should know as many years as possible. Also, several guarantors may be named to a bank or another bank.

In any case, guarantors must be able to demonstrate a steady income and a good Roderick Hudson score to the bank or credit institution. If this is not possible, it is usually not worth making a loan application for a loan with a guarantor.

Pay attention to the type of guarantee

For possible borrowers and guarantors to understand exactly which rights and obligations are associated with a guarantee, they should first note that there are different types of guarantees. In case of doubt, the bank can advise potential credit customers in detail in advance. A consultation by a lawyer is always recommended. Basic information on this topic can also be independently researched on the Internet.

The default guarantee

The default guarantee is the most commonly used type of guarantee. In the case of this form of guarantee, the guarantor may only be called upon if the credit company can prove that the debtor can not or does not want to pay. This means that an unsuccessful foreclosure has to be carried out in advance.

The joint and several guarantee

The joint and several guarantee is associated with a very high risk for the borrower and thus also for the guarantor. In order for the guarantor to be held liable, it is sufficient that the creditor only claims that the borrower does not pay reliably and is insolvent. Potential guarantors should obtain detailed information on the terms of each type of guarantee in order to avoid unnecessary risk.

The global guarantee

In the case of global guarantees, guarantors are not liable for a single loan amount, but rather for all future borrowings that the borrower receives. Potential guarantors should engage in this type of guarantee only in the case of a stable relationship of trust and long-term cooperation with the borrower.

The guarantee on first request

In this type of guarantee, guarantors can already be used for payment on the first default of the borrower. Often, guarantors are “caught cold”. In any case, it makes sense to inform yourself in advance as a possible guarantor of a lawyer about the exact terms of this type of guarantee. A bank is rarely the central point of contact for this, as it only forgives the loan.