A loved one wishes to obtain a credit and asks you to get sure you are. Do not make a hasty decision because this commitment is far from trivial.
Go deposit For the credit of a loved one, it is much more than a boost. “This act is often considered by individuals only as a moral guarantee, underlines Christian Huard, secretary general of the association of defense, education and information of the consumer (ADEIC). This is indeed a purely financial commitment”.
A real responsibility
You must write with your hand the amount of the sum guaranteed in all letters and figures © Getty | ||
You have to be aware, that if the borrower ceases to reimburse the loan, the guaranteer takes over to pay in his place the sums due, the interests but also the possible late penalties. Before accepting, it must therefore be ensured that its financial situation makes it possible to assume the deadlines of the loan in place of the borrower.
Know that there are two types of deposit. In a case, it is said to be “simple”: in the event of a problem, the credit institution first turns to the borrower, and in a second step if the situation could not be regularized, towards the guarantee. In the other case, there is the solidarity deposit. The engagement made is then much more important since the bank will then ask the guarantee to reimburse as soon as it notes that the borrower no longer honors the deadlines of his credit. “In fact, the solidarity guarantees are most frequently requested,” explains Christian Huard. For financial institutions, this formula allows them to avoid having insolvent credits.
The guarantee is still protected
To raise awareness of the commitment made, the law provides on the one hand, that the confidence signs the contract, necessarily preceded by a handwritten mention. With his hand, he must write the amount of the sum guaranteed in all letters and figures.
Also note that, like the borrower, the guaranteeer has the possibility of retracting after the signing of the contract, using the slip -attached slip to the credit offer. It is this document that must be completed, date, sign and refer to the lending organization within seven days of the signature. A relatively short time which gives you time to carefully reread the content of the contract and ensure that you can financially assume this responsibility.
If you agree to endorse the loan of a loved one, throughout the credit, you will be notified as soon as a payment incident has intervened, that is to say if there are more than three unpaid monthly payments. Moreover, if the financial institution warns you late of an incident, you have the right to refuse to pay any penalties of delay that appeared between the date of this first incident and that of which you were informed.
Turn against the borrower
In the case, where a payment incident occurs and that you are forced to pay instead of the borrower and reimburse the credit, have in mind that this deposit is not a donation. This means that you have all latitude to turn against the borrower in order to recover the sums you have just poured to get him out of this bad step. A delicate approach to carry out. Also, before giving your agreement for a deposit, determine with the borrower the conditions under which the reimbursement of these sums would take place. If necessary, sleep on a sheet of paper its commitments, in particular to warn you upstream of possible financial difficulties. In this case, you can agree on punctual financial assistance on your part, to settle one or two monthly payments, and thus avoid the absence of settlement and the procedure of the bank which follows.