Loan with Credit Bureau and surety

December 23, 2019 by No Comments

With a Credit Bureau query, banks assess the risk of lending, as well as the payment of the loan by installments and the repayment of the loan amount. If a negative Credit Bureau entry turns out as part of this credit check, there are two options that can be submitted to a loan seeker.

On the one hand, it will be a loan that is charged with higher interest rates, on the other hand, a loan application can also be rejected. In many cases, the applicant only has the option of drawing on an expensive international loan or taking out a private loan from a circle of friends or relatives. With a foreign loan, a loan seeker should know, the loan amount is limited to 3,500 dollars. If more money is needed, a loan with Credit Bureau and guarantor remains.

Loan with Credit Bureau and guarantor – the options

Loan with Credit Bureau and guarantor - the options

The option of naming a guarantor can make the credit situation look different. Despite a negative Credit Bureau information, a loan can be granted because the bank has the guarantor as security. However, a guarantor has special properties. First and foremost, he must be creditworthy, ie he must have a regular and sufficient income, an open-ended employment contract in an employment relationship is also necessary.

The guarantor must also be made aware of the importance of a guarantee. Many guarantors think that signing a loan agreement is a courtesy. However, this is not the case, because a guarantor is liable for all possible defaults on the part of the borrower with his entire assets. In addition, his own creditworthiness can be put off by the guarantee, which can lead to difficulties with a loan that he himself needs.

A guarantee is a contingent obligation that is not disregarded when reviewing one’s own economic situation. If the guarantor makes a loan request, the amount of the rate that comes from the guarantee can be included in the guarantor’s household account. This can lead to the fact that the freely available income according to the household bill is no longer sufficient for a loan, so that the citizen has to name a guarantor himself.

Effects of a guarantee on a loan with Credit Bureau and guarantor

Effects of a guarantee on a loan with Credit Bureau and guarantor

A loan with Credit Bureau and guarantor should therefore only be taken out with a guarantor if the guarantor can easily cope with the payment default. The joint and several guarantee, which is common practice today, also poses problems. In this way, a guarantor is immediately used to pay installments from non-payment. It should therefore be clear to every guarantor what a guarantee, which he may only consider as a mere favor, can bring about.