Nowadays, taking out a loan is no problem at all.
Financial bottlenecks arose quickly, so you have to look around for a solution just as quickly. With a loan you can bridge these bottlenecks and keep the usual life game.
The creditworthiness of the applicant always determines whether the loan is approved. It must match the loan amount and therefore must not be too low. But sometimes it happens that the creditworthiness is not sufficient to take out a loan. In such a case, a loan with guarantors has to help out so that a loan can even be obtained.
You always take out a loan with a guarantor if your creditworthiness is not sufficient to be able to take out the loan on your own. There can be several reasons for this. For one thing, the income may not be high enough. Or the loan amount is so high that the bank would generally not approve such a loan without a guarantor. No matter what the reason may be. A guarantor is never wrong with a loan because it always brings a lot of collateral and is so popular with banks.
What characteristics a surety must have
A loan with a guarantor is only worthwhile if the guarantor has a very good credit rating. He must have a high income and must not work on an independent basis. In addition, he shouldn’t have to pay off a loan himself and shouldn’t have any other high financial obligations if possible. As a guarantor, you have to be aware that you are fully liable for the loan. If the main borrower can no longer pay the installments, the bank will use the guarantor for this.
Liability is always with the entire assets. So you should always think very carefully about whether you want to act as a surety or not. Especially when the loan amount is very high and the repayment takes many years. Banks may seize everything that is available for settlement.
The banks prefer a loan with an additional guarantor. This means that they have two contacts for the loan and can also bring two people to justice if the installments fail. You can hardly offer a bank more collateral. It is no wonder that the banks ask for a guarantor more and more and also presuppose this from a certain loan amount.