Loan guarantees: the guarantee

The surety is the optimal solution to obtain a loan or a mortgage even in case of small problems in obtaining the desired sum.

The request for a loan is subject to the presentation of guarantees. The applicant, or the one who will be the debtor, must give the bank or the financial company, which will become a creditor, the guarantee of being able to repay the loan. If these guarantees are considered sufficient (at the discretion of the lender) you can have the money you need, otherwise the answer will be negative.

What is the guarantee?

What is the guarantee?

The surety is a legal transaction with which a third person, known as a surety, guarantees the debts of another. This guarantee commitment is made known to the creditor who, as a consequence, will be able to claim on the guarantor in the event of default by the main party. The article that provides the surety is 1936 of the Civil Code .

Characteristics of the guarantee

Characteristics of the guarantee

The first characteristic of the guarantee is the presence of a main obligation: in our case, the loan. The law, in article 1939 of the Civil Code, makes it clear that the surety is void from the moment in which the main obligation also becomes void.

The law provides, in art. 1938 of the Civil Code, which can also be the guarantee for a future obligation (known as an omnibus guarantee) but which must expressly indicate a maximum guarantee amount. In the case of loans and loans, this concept is not applied, in the sense that the guarantee is valid only from the moment in which the financial company or the bank grants the loan.

Among the limits, we see that the amount of the guarantee cannot be greater than the value of the main obligation.

The right of recourse

The articles from 1949 to 1953 specify the relationships between the parties and indicate that the guarantor can refer them to the principal debtor for the sums that he had to pay by virtue of the default of the debtor himself. Basically, if the debtor does not pay the car loan installments (but the concept applies to any other form of financing), the finance company can request the payment of these sums from the guarantor, who by law must pay, except then being able to request a refund of the sum paid.

Attention, however, to the possibility of losing the right of recourse. If the guarantor pays and, for whatever reason, he does not warn the principal debtor that he has done so, in the event that the latter also pays and settles the debt, then the guarantor loses the possibility of having the sums paid back. After all, it is a lack of the guarantor (failure to notify the principal debtor) and the reason why the debtor himself has to suffer economic damages from this absence is not seen.

Guarantees and loans

Guarantees and loans

In the world of loans, sureties are a fairly normal thing, in the sense that the bank always wants to guarantee that it can get back the sums lent “whatever happens”. For this reason, a guarantee is often requested (especially if the sums paid are high and if the main debtor is unable to provide adequate guarantees). Given the fiduciary nature of the legal transaction, it is often the family members (for example a spouse or a parent) of those who need money to grant it.

From the moment you can provide the guarantee for the surety and provided that the guarantor does not have the credit history.

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