Tuesday, 18 February, 2020

Loans with a surety are no longer a thing of the past?

We need adequate creditworthiness to get a loan. Credit credibility is also important because only then will the bank or non-bank institution trust us and transfer the money. Once, when there were no modern methods of checking clients, for example via the Internet in BIK databases, we often met with loans with a surety.

The guarantee contract is a civil law contract in which one party or guarantor undertakes to perform the debtor’s obligations towards the creditor when the debtor does not repay the debt. Therefore, the guarantor will be forced to pay the debtor’s debts when he will not pay the installments. Therefore, the guarantors take on a lot of responsibility and risk.

When is a surety applied?

The surety is applied in a number of different situations. Most often, this form of loan or credit protection is used when a person who wants to receive money does not have sufficient creditworthiness or creditworthiness. Then a bank or a loan company indicates that they can transfer a loan or a loan, but only if we report a guarantee.

With sureties we can meet both in the case of cash loans, which we can spend for any purpose, and higher amounts of loans, for example for a car, mortgage loans.

The number of loans with a guarantee decreases

However, even despite the possibility of using a guarantee, banks and loan companies do not choose such an option very often. Why is it like that? This is mainly due to the fact that a surety is not a guarantee for institutions that the debt will be committed. For example, a guarantor may also have financial problems, so he will not be able to pay the debt he will be obliged to repay.

In addition, an increasingly smaller number of diminishing guaranteed loans results from a more accurate analysis of people who dress for money. As we indicated at the outset, banks and loan companies have at their disposal special databases to which they access via the Internet. In the database of BIK and other databases they can immediately find information about the credit history and the creditworthiness of the client. In this way, they can reduce the risk of non-payment of the liability, and thus the surety becomes unnecessary.

Of course, this does not mean that we will not meet such loans or credits at all. Usually, a bank or loan company asks for a guarantee when our financial and credibility capabilities are not enough.

Is it worth sponsoring loans to other people?

The decision to become a guarantor should always be carefully analyzed. This is due to the fact that if the borrower does not give up his debt, we will have to give back the money, even if we have not seen them before even the eyes. Therefore, for guarantees in principle, it is best to disagree, even if it is asked by a person known to us – from the family or from a group of friends.

When, however, we decide to be a guarantor, let us remember what duties we have on our pregnancy!

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