Having someone else to agree to stand as guarantor of a loan can be the chance to borrow money if the credit rating is not high enough. It may also be the chance for the person who has payment notes to borrow money for something important. Having someone who goes in as guarantor for a loan is only relevant to the slightly larger loans, such as private loans and mortgages. The person who lays out also has to pass a credit check so that the lending institution feels confident about repaying their borrowed money.
The guarantor has a great responsibility
Of course, the goal is never to be able to repay a debt according to what is planned. But unfortunately this can happen and it is then important to know what applies to the person who agreed to act as guarantor.
Should this occur, the guarantor is responsible for repaying the debt. This could then mean that a person, for example, has to sell his house or the like in order to get enough money to pay back. Also, any divorce or similar is not something that affects the guaranty commitment, but this remains even after.
Important to be sure
It is never possible to be completely sure of anything, but you should really be convinced that there will be no problem in repaying the loan you take. Because it is not a fun situation if a guarantor has to go in and solve it all.
Borrowers have become more common
It has recently become less common with a guarantor, but instead, more and more people have switched to having co-borrowers. The difference is actually quite small on how it works in practice. If you look a little more carefully at the whole thing, only the lender can claim money from a guarantor in case the person who lends does not pay while a co-borrower stands on the loan in the same way as the “main borrower”. They are therefore equivalent here and there will be a difference in declaration etc also.