Often, either your own credit rating is not enough to get a loan or the entry in the protection association for general loan protection is negative and you therefore do not get a loan. At such moments, collateral can help, but who has sufficient collateral who does not have a good credit rating and / or does not have a good private credit checker entry? A loan with a guarantor can solve the problem. This comes in two forms: as a loan with a co-signer or as a loan with the attached guarantee declaration.
The loan with guarantor: What distinguishes a guarantor?
A guarantor is a person who offers the ultimate security to the bank and ideally has to do almost nothing for it. Because a guarantor is someone who agrees that he will repay a loan if necessary, if the actual applicant is unable to do so. In plain language, this means that if the loan is paid as planned, the guarantor must never appear. In the case of a loan with a guarantor, he must demonstrate his economic background. In addition, it should not be underestimated how advantageous it really is if the bank knows the guarantor and therefore there is a basis of trust.
The loan with guarantor: the variant with a co-signer
Banks often hide elegantly that they actually want a loan with a guarantor when lending. They note that it would be much easier to get a loan and that you could offer much better interest rates if a second person also signed the loan agreement. At this moment, of course, the second person becomes fully liable for the loan and acts as a guarantor. The bank also queries economic data about them. The variant with a co-signer is usually available for small loans.
The loan with guarantor: the variant of a guarantee
In addition, there is of course also a loan with guarantors in the real sense. One person applies for a loan, usually a larger sum, and another person or several sign a guarantee for this loan that is legally binding. The advantage of this system: Several people can act as guarantors and this also applies to legal entities such as companies. Incidentally, both variants are of course not mutually exclusive: for a loan with a co-signer, a third-party person can also provide a legally binding guarantee.