Banks accept many different collateral for the repayment of credit obligations. These are personal and material safeguards. The group of the former includes loan repayment guarantees by third parties. Who can become a guarantor and what obligations are associated with it?
A guarantor can be a person who has sufficient creditworthiness and is credible in the eyes of the bank.
Who is the guarantor?
When granting loans to its clients, the bank takes into account many criteria, primarily concerning the creditworthiness and potential of the potential borrower. This credibility can be increased thanks to loan repayment collateral. A guarantee of repayment is such a guarantee.
The guarantor is the person who certifies on the relevant bank printout that he will repay the loan if the principal borrower fails to do so. Thus, he takes great responsibility.
Who can be the guarantor?
Credit institutions accept guarantors who have actual creditworthiness and will be able to repay the loan if the borrower fails the task. The guarantor must have a stable and stable source of income. The bank will easily accept as a guarantor of the person:
- employed under an employment contract for an indefinite period (or for a definite period, but long enough, acceptable by the bank),
- employed on the contract,
- practicing liberal profession,
who are pensioners (although there are some restrictions on the age of the guarantor).
The age of the potential guarantor is of great importance for people who apply for a loan with a long repayment period. At the end of the loan repayment period, neither the borrower nor his guarantor may be an old man. Some loan agreements set a fixed age limit for potential guarantors.
The guarantor must have sufficient creditworthiness, just like the borrower. His family relations and financial obligations are taken into account. Negative credit history with a guarantor disqualifies him from performing such a function.
Obligations of the guarantor
The basic obligation that the guarantor undertakes is to cover the borrower’s obligation if he is unable to pay it back himself. The guarantor has the right to obtain information from the bank about the repayment procedure of the guaranteed loan and about possible delays in repayment. He may also demand a refund from the borrower, which he has repaid to the bank for being a guarantor.