One of the requirements for obtaining a loan is the availability of a guarantor. In practice, finding a guarantor is not so easy. Therefore, the requirements of the bank to the guarantor are not much different from the requirements for the borrower.
People who have never encountered such loans are not always aware of the requirements of the law and all the pitfalls. Even the most responsible and close people can get sick, lose their jobs and get into other life troubles. By signing a contract of guarantee, the client acquires a number of obligations to the creditor. It is important to know that by agreeing to this condition, the client not only confirms the reliability of the borrower, but also acquires obligations to pay the loan. A surety is a certain guarantor of debt repayment.
What is a guarantee
A guarantee is a certain agreement concluded between a creditor, a borrower and the surety itself. A third party can be both an individual and a legal entity.
The bail agreement provides for liability for repayment of the loan in case of default by the main borrower. Depending on the type of arrangement, liability is of two types:
- Joint responsibility - the borrower and the guarantor are on equal terms, therefore, the lender has the right to demand repayment of the debt.
- Subsidized liability - first of all, the borrower is responsible for repaying the debt. The creditor can demand repayment of the debt only in case of refusal of the borrower.
If the contract concluded involves subsidized liability, then before making a claim to the guarantor, the bank must make sure that the borrower is insolvent.
There are situations when it is possible to avoid responsibility for repaying a loan, we will talk about this later. A surety in a bank is a partner, friend, relative, acquaintance, spouse or even a stranger.
What the guarantor risks
The illiteracy of our people in financial matters can lead to a disastrous result. A surety and a pledge is not just a formality, the negative experience of many citizens who have fallen into such a trap is significant evidence of this.
Acting as a guarantor, you risk a lot.
Consider the likely risks:
- If for some reason the borrower refuses to pay the debt, the lender has the right to demand repayment from the guarantor.
- A person’s property may be recovered as payment.
- A loan guarantor risks his financial reputation. Very often, due to the fault of the borrower, the guarantor also acquires a negative credit history, which prevents further work with banks.
It is important to know that some loan agreements provide for collateral. A guarantee is of two types: blank (without security), property (with security). Thus, if the contract provides for property guarantee, the lender has the right to seize your property.
When can I agree to a guarantee at the bank
There are situations when the surety is the financial partner or spouse of the client, in such cases the need for the distribution of monetary obligations is quite logical. Nevertheless, before you agree to such a serious step, you should carefully consider everything.
What factors are worth paying attention to:
- You need to find out all the information about who receives the funds. 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. You need to soberly judge and calculate whether you can pay off this debt without any special difficulties. A surety is the need of the bank, but not of the borrower.
- Before signing the contract, you must study the entire contract and find out your questions.
Why does the bank require a guarantee
Today, not all banking products require collateral or a guarantor. For example, consumer or commodity loans do not require any special conditions. If you look, you can summarize that loans that are taken in large amounts are potentially dangerous for the lender. Because there is a high probability that in a few years the client may suddenly lose the source of income and become insolvent.
A surety is a kind of guarantor of payment of a loan. Banks understand that not all transactions are backed by insurance, so it is necessary to exclude all risks by shifting the responsibility to another person. The loan guarantor, like the borrower, must confirm its solvency and collect all the necessary documents.
Avoiding Responsibility
There is a certain list of situations prescribed in the Civil Code of the Russian Federation, in which the guarantee is terminated:
- When repaying a debt.
- In case of a change in the contract without the consent of the guarantor (change of rates, increase in the term).
- When transferring a debt to another responsible person without the consent of the guarantor.
- Upon the expiration of the contractual guarantee period.
How can I challenge a court decision
You can challenge the decision of the bank in such cases:
- If the bank requires debt collection after 6 months from the date of default on the loan.
- If the surety did not agree to the contract, and the transaction is fictitious.
- If the guarantor is legally incompetent.
- If the surety deducts 70% of the income for child support.
- If the surety has no income and does not own any property.
For any situation, the guarantor of the borrower may become a debtor. When paying the debt, the surety has the right to collect money from the main borrower through the court.
