Why is a guarantee necessary for your personal loan?

5 days
30 days
Loan term
30 days
Loan information
Personal loans

One of the most questions asked when getting a loan is "Can I Get A Guaranteed Loan Approval?". Those who have already had the experience of requesting a personal loan through a conventional bank will know that sometimes a guarantor or a guarantee is required on a property that can cover the possible non-payment of the debt. Normally, small personal loans that are requested to cover specific and specific needs, for example, to finance the acquisition of a vehicle, do not require any guarantee, or at least your bank should not require it, unless your credit history is extensive and / or conflicting.

As you will also know, banks always investigate the loan applicant before accepting the application. This ensures that the person is not included in any of the current delinquent lists, such as the RAI, and that they have regularly paid the installments of other current or past personal loans. However, when the amount of credit requested is somewhat high, say more than € 40,000, for example, for the purchase of a premises or a prefabricated holiday home, if the applicant also maintains other lines of financing open with the bank Very possibly you will be required to have a guarantee on some of your properties (already paid) or from a guarantor who responds in case of non-payment.

What happens then when the personal credit repayment payments are defaulted? Simply, the bank, after the initiation of the corresponding legal litigation, will execute the guarantee. This means that the bank will take the guaranteed property to sell it and obtain the money owed to it, or it will demand the payment of the debt from the guarantor, taking the property as collateral or seizing the appropriate bank accounts that cover the amount of the default. For this reason, it is essential that the fine print with the conditions and terms of each personal loan is carefully read before signing it to avoid really scary situations.

What other alternatives do we have then to get our personal loan? Currently the online credit sector is undergoing a surprising development in our country, precisely because it is presented as an agile and comfortable alternative to the financing offered by traditional banks. Online credit agencies are also financial entities or branches / subsidiaries of financial entities that have the same guarantees and controls. However, its modus operandi eliminates a large part of the conventional bureaucratic procedures and greatly speeds up the granting of financing to families, households, individuals and professionals. Without giving up the preliminary investigation of the applicant's file, the approval of the credit in many cases is almost granted in a few days (or even hours). In this way, online credits are becoming an increasingly popular option among consumers to obtain the financing they need in a timely manner without too many demands, including bank guarantees that can become a double-edged sword.

about the author

Maria Solis Burley

Credit consultant in Spain. Financial Analyst at Crédito Victoria.
LAST UPDATED: October 14, 2016