Many consumers want to take out their loan without guarantors and co-applicants if possible simply because they do not want to involve third parties in their personal financial affairs or simply because they do not have a suitable guarantor or co-applicant. Our contribution deals with this topic of general interest and shows interesting solutions.
Banks naturally have very different goals. They only grant loans without guarantors and co-applicants to consumers with the best credit rating. They are only too happy to secure their loans with guarantors or co-applicants. For this reason, they require the loan applicant to include a guarantor or a co-applicant in the contract if their creditworthiness is not adequately assessed. For banks, this is a simple way of securing loans and keeping the credit default risk low. Loans without guarantors and co-applicants are mostly reserved for borrowers whose creditworthiness is beyond any doubt.
What the guarantor brings to the bank
The guarantor gives a bank more security. Ultimately, banks are about making money and keeping loan defaults to a minimum. Risky credit transactions are not made at all or additionally secured. For this reason, it is standard practice for many banks for the spouse to sign the loan agreement with loan applicants who are married. No matter whether it is suitable as a surety or not. In such cases, the spouse is not a guarantor, but the co-applicant.
The bank grants a loan to both of them, who are therefore jointly responsible for servicing their installment loan in accordance with the contract. Banks often neglect the fact that a wife may not have enough income to pay the installments alone. Later, however, this can only be held liable to a limited extent. Here, the co-application is to be seen more as a moral than a financial aspect.
With the best credit rating, the loan is easily feasible without guarantors and co-applicants
Loan seekers with the appropriate creditworthiness, who certify their creditworthiness, have the best chance at all banks of getting their loan without a guarantor or co-applicant. However, this applies to very few loan applicants. Those who enjoy the best creditworthiness often belong to the group of people who pay in cash and do not use loans.
When the loan is not possible without a guarantor or co-applicant
The number of loan applicants who cannot get a loan without guarantors and co-applicants is already high. For example, consumers with poor Credit Bureau should always expect that they will only get a loan if they include a solvent guarantor or co-applicant in the contract. Even unemployed or Hartz IV recipients generally do not get credit as the sole applicant for credit. Anyone receiving wage replacement benefits such as sickness benefit or parental benefit must also expect the bank to ask for a guarantor.
A problem for many loan seekers is that it is often not so easy to find a guarantor or co-applicant. On the one hand, the people in question must be willing to act as guarantors and, on the other hand, they must meet the banks’ credit rating requirements. A potential guarantor who has no freely disposable income is not suitable as a guarantor.
What the guarantee means to the guarantor
Taking over a guarantee is more than simply signing a guarantee declaration. The guarantee can have unpleasant consequences if the guarantor later wants to take out a loan himself. The bank evaluates the contingent liability obligation as if it were the guarantor’s obligation. Ultimately, this can mean that a guarantor needs a guarantor just because he guarantees.
In addition, the guarantor who has signed a joint and several guarantee must always count on the bank to make use of it if the borrower does not pay his installments.