If you need extra liquidity and plan to apply for financing, it is possible that the bank or credit institution may request the intervention of a guarantor. Thanks to the intervention of a guarantor, you will have a greater chance of obtaining the required sum because, if you fail to pay the installments, the bank will be able to turn to him who will have the duty to intervene immediately in your place. But does the guarantor of a loan have to be a relative? What are your obligations and what are the alternative solutions if you don’t have one? Also can you change the guarantor of a loan?
So if you want to apply for a loan and you have asked yourself some of these questions, by reading this article you will find all the information you need to avoid getting unprepared in the bank and to have a greater awareness of your rights and the different market opportunities. But let’s start from the beginning and then try to understand what the guarantor is in a loan, what his duties are and who can perform this important function.
Requirements and duties of the guarantor of a loan
As we said, the guarantor of a loan or a mortgage represents an additional form of guarantee for the bank, the certainty that the sum paid out is returned in the event of difficulty of the contract holder due to the intervention of a third person, precisely the guarantor. The intervention of a third person acting as guarantor is requested when the applicant’s financial situation is not completely reliable or in cases where the requested sum is particularly high.
For this reason, the candidate as a “guarantor” must prove to be financially reliable and must possess certain requisites, such as:
- A permanent employment contract;
- A good income, sufficient to guarantee intervention in the event of failure to pay one or more installments;
- A good credit history, therefore it must be a “good payer” from the consultation of the Central Risks;
- Do not exceed 75 years of age at the time of debt repayment;
- Even the possession of properties could be a prerequisite.
Who can act as guarantor for a loan?
In most cases the person who can act as a guarantor on loan is a very close family member (parents, brothers or sisters), people therefore willing to intervene promptly in the event that you do not succeed in supporting the payment of the loan installments. It is therefore people willing to make an important commitment and to face all the consequences. This however does not exclude that in addition to family members, even a friend or a person not bound by family ties can act as guarantor.
In fact, the most important thing for the credit institution that provides the sum requested is that the person presented as guarantor has all the requisites required and proves to be reliable from a financial point of view. A necessary condition and completely unrelated to the family relationship. So be very careful, if someone were to ask you to act as guarantor for a loan and for a mortgage, do not underestimate all the obligations and duties that you are assuming, it is in fact a formal commitment, regulated by a contract.
In fact, if the holder and the guarantor were unable to both intervene and pay the loan installments on time, they would immediately be reported as bad payers to the Central Financial Risks. This would compromise the future possibilities of access to credit. So if you act as a guarantor, be aware of the responsibilities you are assuming and know that in special cases or of extreme difficulty, you will be able to evaluate the possibility of getting rid of the role of loan guarantor. However, this happens only in specific situations and requires the implementation of particular bureaucratic procedures.