What is the guarantor responsible for?
Posted: Tue Feb 18, 2025 9:46 am
amount of liability - when securing credit transactions, the guarantor is usually liable to the same extent as the borrower;
the time periods within which the guarantor is obliged to fulfill the demands made on him;
consequences of failure to fulfill obligations to the creditor.
The package of documents is similar to what is required when drawing up a loan agreement: passport, salary certificate, copy of work record book and other documents depending on the requirements of a particular bank.
By law, the guarantor is the same debtor as the borrower. He bears lebanon mobile database joint and several liability with the debtor for the secured obligation. This means that he is responsible for all debts of the borrower, including:
principal debt;
interest;
penalties for violating the terms of a credit obligation - increased interest rates, late fees, fines for failure to comply with the terms of the agreement.
The obligation to pay off the overdue debt arises for the guarantor immediately after the borrower has violated his obligations and the creditor has presented him with his demands. Specific figures and terms are specified in the surety agreement.
The creditor may make demands on both the borrower and the guarantor at the same time. This means that, for example, when collecting a debt through the court, he does not have to try to collect the debt from the borrower first. He can make demands on both the debtor and the person who guarantied for him.
Being presented with a debt for repayment is not the only risk of guaranteeing. By guaranteeing for someone else, you reduce your solvency and put your own credit history at risk.
When calculating solvency, credit and financial institutions take into account all financial obligations of applicants. These are both their own loans and those for the return of which the applicant has guaranteed. Therefore, if the volume of total obligations is too large, you may be reduced in the amount of the loan or refused to issue it at all.
And of course, any delay will negatively affect your credit history, which now depends not only on you, but also on third parties. Are you confident in their discipline, integrity and financial solvency? It is better to get answers to these questions before signing the contract.
the time periods within which the guarantor is obliged to fulfill the demands made on him;
consequences of failure to fulfill obligations to the creditor.
The package of documents is similar to what is required when drawing up a loan agreement: passport, salary certificate, copy of work record book and other documents depending on the requirements of a particular bank.
By law, the guarantor is the same debtor as the borrower. He bears lebanon mobile database joint and several liability with the debtor for the secured obligation. This means that he is responsible for all debts of the borrower, including:
principal debt;
interest;
penalties for violating the terms of a credit obligation - increased interest rates, late fees, fines for failure to comply with the terms of the agreement.
The obligation to pay off the overdue debt arises for the guarantor immediately after the borrower has violated his obligations and the creditor has presented him with his demands. Specific figures and terms are specified in the surety agreement.
The creditor may make demands on both the borrower and the guarantor at the same time. This means that, for example, when collecting a debt through the court, he does not have to try to collect the debt from the borrower first. He can make demands on both the debtor and the person who guarantied for him.
Being presented with a debt for repayment is not the only risk of guaranteeing. By guaranteeing for someone else, you reduce your solvency and put your own credit history at risk.
When calculating solvency, credit and financial institutions take into account all financial obligations of applicants. These are both their own loans and those for the return of which the applicant has guaranteed. Therefore, if the volume of total obligations is too large, you may be reduced in the amount of the loan or refused to issue it at all.
And of course, any delay will negatively affect your credit history, which now depends not only on you, but also on third parties. Are you confident in their discipline, integrity and financial solvency? It is better to get answers to these questions before signing the contract.