Why do they ask me for a guarantee for a loan application?

Is this important? Yes. Why do they ask me for a guarantee for a loan application?

When asking for a loan of any kind

They ask you for a series of requirements that you must meet. These requirements include having an endorsement. The guarantee must have a property in its name that demonstrates in some way the economic solvency. That property should not be on trial without any legal problem.

An endorsement is a person you trust that guarantees that you will make the payment of the credit accordingly. The guarantee, in general, is the deed of the immovable property that it has, because, in case of non-payment, the guarantee will have where to pay. That is why the real estate must not have any legal problem. Now, they don’t always ask that the guarantee show that they have a property, but in most cases they do.

Why have a credit application guarantee

When requesting a loan from a financial institution, the amount requested is usually high. You can be to buy a car, a house, start a business, among others. Because of this, the help of a guarantee is needed. This guarantee will support you in the credit and is supposed to help you pay off the debt in case you can’t. An endorsement is a person who trusts you blindly because he knows that you can cover the debt and that you will not fail him.

There are mainly two types of guarantees: a natural person and a bank guarantee. The natural person is someone who knows you and helps as a guarantee. It can be a family member or friend. On the other hand, in the bank guarantee, an institution assumes the figure of the guarantee, supporting you. Obviously, this type of guarantee has a price, which represents another expense, apart from the credit you have already requested.

Having an endorsement is very important

When someone lends an endorsement, you must respond accordingly, paying your credit on time. Remember that person is helping you selflessly.

In case you want to be someone’s endorsement, just look if that person is solvent. This is very important because in case the debt is not met, you will have to pay.

Being a guarantee is very important. Appreciate who your guarantee is and be an endorsement in case they need you.