Sometimes a loan with a guarantor turns out to be more profitable than alternative loans. And then the bank client has a lot of questions: who and under what conditions can be involved in a transaction with the bank, what responsibility will the person who guarantored for the borrower bear in the event of a debt, how will the registration take place, and so on.
We will answer these and other questions in the continuation of the article. We will also tell you what obligations the guarantor of the loan assumes and how his status differs from the role of the co-borrower.
Who is a loan guarantor?
In fact, a guarantor is a person who guarantees the jiangxi mobile number database fulfillment of obligations by another person. In our case, the repayment of a loan by the borrower. Therefore, if the latter has a debt and cannot repay it independently, then the guarantor must do so. By involving him in the transaction, the bank seeks to minimize risks.
This is necessary, among other things, to provide the borrower with more favorable conditions - for example, approval of a larger amount at a lower interest rate or issuance of a loan without collateral. But do not confuse the guarantor with the co-borrower - they have fundamentally different statuses and obligations. The consequences for them may also differ from each other.
The co-borrower actually takes out a loan together with the main borrower. At this point, he becomes a client of the bank. He is granted the same rights as the main borrower. And, accordingly, the same obligations are imposed on him.
The bank will ask the guarantor to repay the debt only if the borrower fails to do so. There are exceptions, for example, situations where payment is impossible in the event of the death or acquired disability of the insured client of the bank. But in most cases, the failure of the main borrower to repay the debt still leads to the bank turning to the guarantor with a demand for payment.