Applying for a loan with a surety is not honorary, but legitimate as a last resort out of the credit crunch. Nevertheless, the risks should be considered and the guarantee should not be seen as a natural friendship service. The article provides information on the subject of guarantees, liability risks and alternatives.
The loan with a guarantee – more than just a friendship service.
For the guarantor, the loan with a guarantee is more than just a simple friendship service. Whoever vouches is also liable. Everyone should carefully consider the willingness to guarantee. The guarantee is about more than just trust. If you make the wrong decision, you can face financial hardship yourself. Whoever vouches should also be willing and able to bear the burden alone in an emergency. A guarantor should familiarize himself with all of the facts before making his decision.
Demanding someone else’s guarantee for a loan should only be the last resort. Everyone is primarily responsible for themselves. Claiming someone else’s guarantee is unfortunately also a declaration of bankruptcy on your own responsibility. If you still have no other way out, you should do everything in your power so that the guarantor does not have to stick. This includes not only ensuring repayment whenever possible, but above all involving the guarantor in the event of problems. Those who remain silent about repayment problems and risk a loan termination act irresponsibly.
Alternatives to the guarantee.
A guarantee is always required if the borrower does not offer sufficient security through his income. However, the guarantee is not the only way for the bank to provide this necessary security. Real assets can also be pledged as security for repayment. A possible real asset would be life insurance for old-age provision, for example. Capital-building life insurance always has a surrender value. This surrender value is available as resilient security. The Kfz-Brief could provide the necessary security for other loans.
A fundamentally different alternative is to change providers. Just because a bank requires the guarantee does not mean that the loan will not be granted without a guarantor. Another provider may apply lower security standards. Private investors offer good chances if the banks do not want to get by without a guarantee.
The loan request and possible collateral only have to be set on one of the large platforms for around USD 10. If you are not completely over-indebted, you will always find investors. You can still switch to a loan with a guarantee.
The facts and suggestions at a glance:
- The guarantee is more than just a friendship service and must not be called lightly.
- As a surety, you should be aware of your risk of liability.
- Only those who are actually able to repay the loan on their own should guarantee it.
- A guarantor should be informed immediately of any repayment problems.
- The loan with a guarantee should only be seen as a really last resort.