The guarantor is the same debtor of the bank as the borrower. Today, not all banking products provide collateral or a guarantor. For example, consumer or commodity loans do not require any special conditions. The guarantor is a kind of loan guarantee guarantor. A surety agreement provides for liability for repayment of a loan in case of non-fulfillment of debt obligations by the main borrower.
One of the requirements for obtaining a loan is the presence of a surety. In practice, finding a surety is not so easy. Therefore, the requirements of the bank to the guarantor are not very different from the requirements of the borrower.
People who have never faced such loans are not always aware of the requirements of the legislation and all the pitfalls. Even the most responsible and close people can fall ill, lose their jobs and get into other life's vicissitudes. By signing a surety contract, you buy a number of obligations before the lender. It is important to know that by accepting this condition, the client does not simply confirm the credibility of the borrower, but also acquires commitment to repay the loan. The guarantor is a guarantee of payment of a debt.
What a guarantee
A bond is a contract concluded between the creditor, the borrower and the guarantor directly. The role of a third party can be both physical and legal entity.
A surety agreement provides for liability for repayment of a loan in case of non-fulfillment of debt obligations by the main borrower. Depending on the type of arrangement, responsibility is of two types:
- Joint liability - the borrower and the guarantor are on an equal footing, so the creditor has the right to demand repayment of arrears.
- Subsidized liability - in the first place, the borrower is responsible for repaying the debt. A creditor can only be required to pay the debt if the borrower refuses to do so.
If the signed agreement involves subsidizing the liability, then before the claimant claims, the bank must make sure that the borrower is insolvent.
There are situations when you can avoid responsibility for repaying a loan, let's talk about it later. The guarantor in a bank is a partner, friend, relative, acquaintance, a man or a completely outspoken person.
What risks the guarantor risks
The illiteracy of our people in financial matters can lead to a dreadful result. The guarantor and pledge is not just a formality, the negative experience of many citizens who have been trapped in this is a significant proof.
Consider the possible risks:
- If the borrower for some reason refuses to pay the debt, then the creditor has the right to demand repayment from the guarantor.
- As a payment, the property of a person can be levied.
- The mortgage warrant risks its financial reputation. Very often the fault of the borrower is also guaranteed to obtain a negative credit history, which impedes the work with banks in the future.
It is important to know that some loan agreements provide for collateral. Porok can be of two types: blank (without security), property (with mortgage). Thus, if the contract provides for a property guarantee, the creditor is entitled to arrest your property.
When you can agree on a surety in the bank
There are situations where the guarantor is a financial partner or a client's spouse, in such cases the need for distribution of monetary obligations is quite logical. However, before agreeing on such a serious move, you should carefully consider everything.
What factors should pay attention to:
- You need to know all the information about who gets the money. It is especially important to find out the place of residence, financial security, the availability of other loans, solvency and trustworthiness of a person.
- Just in case you need to evaluate your financial capabilities. It is necessary to soberly judge and calculate if you can repay this debt without much difficulty. The guarantor is a need of the bank, but not the borrower.
- Before signing the contract, you need to examine the whole contract and find out your questions.
Why does the bank require a surety?
Today, not all banking products provide collateral or a guarantor. For example, consumer or commodity loans do not require any special conditions. If to understand, it is possible to summarize that the loans, which are taken for large sums, are potentially dangerous for the creditor. Therefore, as there is a high probability that in a few years the client may suddenly lose sources of income and become insolvent.
The guarantor is a kind of loan guarantee guarantor. Banks understand that not all transactions are backed by insurance, so you must exclude all risks by transferring responsibility to another person. The guarantor of the loan, as well as the borrower, must confirm its solvency and collect all the required package of documents.
How to avoid responsibility
There is a certain list of situations enumerated in the Civil Code of Ukraine, in which the guarantee is terminated:
- When repaying debt.
- In case of change of the contract without the consent of the guarantor (change of rates, increase of the term).
- When transferring a debt to another responsible person without the consent of the same guarantor.
- Upon the expiration of the contract period of the surety.
How can I appeal a court decision
You can appeal a bank decision in the following cases:
- If the bank requires a debt collection after 6 months from the date of non-payment of the loan.
- If the guarantor did not agree to the agreement, and the transaction is fictitious.
- If the guarantor is incapacitated.
- If the guarantor deducts 70% of the income on alimony.
- If the surety does not have any income and does not own any property.
For any situations, the surety of the borrower may become a debtor. When paying arrears, the guarantor has the right to collect money from the main borrower through the court.