A guarantor is obliged to repay the payday loan to the lender if the actual lender is insolvent. The legislature actually provides that the guarantor may only be taken into recourse after a fruitless forced operation. However, the usual practice in granting a payday loan is a contractual agreement under which a secure insolvency of the credit customer gives rise to the right to use the agreed guarantee. A summay is on plainsnews.com
Credit institutions prefer co-applicants to guarantors
Most financial institutions prefer to grant a payday loan application without a guarantor, preferring a co-applicant to a low-credit client. The main reason is the strict treatment of guarantees by courts. Especially a guarantee for relatives and good friends triggers the suspicion to be awarded as a result of a strong social bond and without regard to the economic power.
The Bank can counter this by expressly informing the guarantor of the consequences of a guarantee and, at the same time, checking its economic conditions more rigorously than with the actual borrower. Another advantage of the payday loan applicant is that it is on an equal footing with the principal borrower and not only in the event of default for the payday loan repayment. Consequently, it is almost always possible to obtain the desired payday loan without a guarantor if the customer submits the application together with another person.
What collateral does the Bank use in granting payday loans without guarantee?
In order to obtain a payday loan without a guarantor and at the same time without a co-applicant, a positive Schufa information and a sufficiently high fixed income for the payday loan repayment are required. Contrary to this basic rule, Swiss banks grant their payday loans without asking for a Schufa and, as compensation, impose stricter conditions on their income and their security than usual. Even in the case of unsafe employment or a multi-source income, borrowing without a guarantor is possible if the claimant has Schufa information without a negative characteristic. In this case, immediate credit without salary allowance is most appropriate, with the obligation to provide correct information on total income, despite the absence of supporting documents.
The guarantee bank as a substitute for a guarantor
Unlike payday loans to consumers, obtaining a payday loan guarantee is common to businesses. This will award a payday loan default guarantee for a small premium and replace the otherwise to be provided personal payday loan guarantee. Most borrowers perceive the payday loan agreement as having a guarantee given by a guarantee bank as a payday loan without a guarantor, because instead of a personally known individual, an anonymous institution acts as guarantor.
For the financial institution, however, the guarantee commitment of the replaces a personal guarantor in full. Especially when starting a business, state-owned guarantee banks offer their services to the founders. In contrast to most commercial banks, the state-owned promotional bank grants promotional payday loans to companies as well as private individuals in many cases without personal guarantor and without guarantee.