Many of our borrowers make use of guarantees to offer a more interesting and secure credit for the investors. A credit with a guarantor makes sense because the investor is on the safe side in the case that the borrower can’t pay his instalments anymore.
We would like to use this opportunity to give you some brief information about loans with guarantee. Bürgschaft näherbringen.
What is a guarantee?
You can hedge your credit by taking a guarantor on board. With a contract of joint security, the guarantor (usually an individual) signs up to take responsibility for the borrower’s loan.
If the borrower should get unable to pay back his debts, his guarantor is obliged to take the reimbursement on.
That means, that the guarantor has to pay for the borrower, if he’s not able to refund the loan.
What offers you a guarantee at Cashare?
For the safety of SME loans, it often needs the joint security of a shareholder or a co-owner. If the SME is not able to refund the loan, we can fall back on the individual and his assets.
How to contract a guarantee?
The contract of joint security is a unilateral commitment that undertakes the guarantor to assume full legally responsibility for the borrower’s loan. The guarantee document needs to be certified by a notary. Usually, the certification is proceeded next to the guarantor’s place of residence and will be deposited at Cashare. The guarantee ends with the refund of the loan by the borrower and there is no way of early termination.
In conclusion, it brings a better credit rating for borrowers to ask for a loan with guarantee and at the same time it mitigates the risks for the investors.
Your Cashare Team!
