May 26 2022
What is a Loan with Guarantee Philippinas
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When requesting financing, it is important that you know the figure of the guarantee; a very common element in the area of credits and loans that can generate confusion in users. Loans with collateral imply certain obligations, so this time we want to clarify all doubts related to this type of financing, including its requirements and the best offers.
Offer of Guaranteed Loans
In addition to banks, there are many lending companies that offer guaranteed loans. However, we have made a compilation of the most reliable options and with a varied offer within the market.
Thanks to guarantees, it is easy to obtain high financing such as loans of 50,000 pesos quickly and completely online. At Monetochka.com we bring together the best lenders so that you can obtain your credit with the greatest peace of mind.
What is a Loan with Guarantee?
First of all, you should know what a guarantee is? It is a guarantee that you must offer to respond to an economic responsibility. In this way, collateralized financing represents a type of financing in which we must offer a payment guarantee to the lending company so that you can be sure that you will receive your money back. In case you cannot return the monthly installments of a financing, you will have to face your debt through the guarantee.
Types of loans with collateral
There are different forms and elements that can be used to guarantee a loan. Among the most common, we have:
Loans with Personal Guarantee
For this type of loan, the participation of a person or entity is required that will respond for your obligation when you finish paying your debt in case you cannot do it, as it is the case of the company Moneycat. Basically, the guarantor has to sign a contract in which he agrees to pay your debt if for some reason it becomes impossible for you to continue paying it.
The figure of the guarantor acquires the same responsibilities as the person who originally acquired the loan , maintaining the original conditions of the loan. Guarantor status is hereditary, so if the guarantor dies, their offspring appear as guarantors of the loan. In addition, once the debt is resolved, the guarantor can claim his money from the person who applied for the loan.
This person must respond with their own present and future money or assets until they finish paying off the loan. If you are unable to do so, you run the risk of be in bad credit history file.
You should know that, if you guarantee a loan, you will appear in the CIRBE (Central Risks of the Bank of Philippinas) which works as a centralized database where credit operations are registered. Appearing in this register can reduce your chances of accessing other loans while you are a guarantor of an obligation.
Requirements to be a guarantor of a loan
You should know that not just anyone can appear as a guarantor of a loan. It is important that you meet certain conditions so that you do not represent a risk for the lender:
- Being of legal age.
- Have regular and stable income, so it may be essential to present a payslip or certificate that you receive a benefit such as a pension.
- You must be solvent at the equity level, that is, with all your assets paid, since you will respond with your assets if you do not have money to guarantee the loan.
- The financial and credit history of the guarantor must be equal to or better than that of the applicant, so that it represents a real guarantee for the entity.
- Not have pending debts or appear in delinquent files.
Home Guaranteed Loans
In this case, we are not talking about a person or entity that will take care of your debt, but you can use any of your properties as collateral, such as a home or premises. The value of your home will be key so that they can grant you this type of loan.
Lenders such as Digido or OLP can finance up to 100,000 PHP through a mortage. In some cases other types of real estate are used, but both parties must agree and this must be included in the contract.
Loans with a vehicle as collateral
The essence of this type of loan with a car as collateral is that the vehicle offered as collateral must be of a value equal to or greater than the total amount of the loan. In this way, in the event of a default, the entity would keep said asset.
In fact, in companies like Ibancar, you can establish a car up to 5 years old as a guarantee and you do not have to stop using it. In this case, they can finance up to 60% of the appraised value of the vehicle and will not take into account your credit history.
Financing with a Bank Guarantee
As its name indicates, it will be a bank that will undertake to deal with your debt in the event that it is impossible for you to pay. Of course, the bank will charge you a series of commissions for assuming the risk of guaranteeing your debt. These amounts usually vary according to the total amount of the loan, the repayment term and the risk they represent, but you should know that banks normally only guarantee their clients. If you are happy with your bank and need a loan, you can check loans without changing banks.
What loans can be guaranteed?
Normally, it is the lending companies that can demand the figure of a guarantee for certain types of loans. However, the most common loans that can be guaranteed are:
- Personal Loans of high amounts.
- Business loans for legal entities.
- Mortgage loans.
Basically the credits that can be guaranteed or that require the figure of a guarantee, are those that involve large amounts of money. In these cases, it is presumed that the applicant may fall into a situation of non-payment or that his financial level will not be up to the contracted obligation and to minimize risks, the presence of a guarantee is requested.
However, this does not mean that you need to have stable income to apply for a loan, since there are loans without payroll. The presence of a guarantor has more to do with the amount requested than with your current financial situation.
In this way, when your debt is less than 80%, the figure of the guarantor will disappear. In the end, this ends up being a safer and less risky method for the three parties involved.
Where to apply for a guaranteed loan?
You can request a credit guarantee both in banks and in private lending companies. The difference is that banks usually request many more requirements and also involve face-to-face procedures that can last weeks, being a process that ends up lengthening.
If you are looking for a loan with a guarantee without much paperwork, it is best to opt for private lenders, since most allow you to do the procedures 100% online. In addition, they study your financial situation individually and offer you an immediate response adapted to your needs, you can have the money in a couple of days.
What happens if there is a default? Who is garnished first?
If it were the case that neither you nor your guarantor can afford to pay the loan, it is a fact that one of the two will be seized, losing ownership of their assets, but who is seized first?
Normally, in this type of situation , a detailed study of the debtor's financial situation is carried out to assess why he cannot afford to pay the loan. If this were to result in bankruptcy, they would then proceed to examine the financial situation of the guarantor.
In the event that the guarantor has a favorable financial situation with stable income, it is he who pays the monthly installment of the loan., if it does not have the capacity to respond, it will be the guarantor who suffers the consequences of the embargo and not the original debtor.
You may also read about top app loans in Pilipinas 2022.