The Guarantees Required in Payday Loans
Payday Loans do not require guarantees linked to the assets to be purchased or already owned. The only guarantee that is required in some cases is the signature of a guarantor (co-obligator), who takes responsibility for the installments to be paid if the principal debtor defaults. This guarantee may be required in special cases, such as the amount that is too high compared to the actual repayment capacity of the applicant, the applicant’s recent seniority and other situations. The credit institution decides from time to time whether to request this guarantee, based on the profile of the customer and the “score of the practice”.
The Figure of the Guarantor about the Payday Loans
The guarantor in payday loans, is a person who voluntarily assumes responsibility towards the credit institution, to provide for the repayment of installments in place of the main debtor, when the latter is unable to provide for himself repayment of installments. The guarantor, therefore, at the signing of the loan contract, provides for signing the loan and, for this reason, the guarantor assumes the same obligations towards the credit institution. In case of non-payment of loan installments, the guarantor has the obligation to pay the installments to the credit institution, replacing the payment to the principal debtor.
Tip: When you realize that you cannot pay an installment without waiting for it to expire, it is important to inform the guarantor of the situation, as a delay in payment will cause a report in the database as a bad payer, both for the principal debtor and for the guarantor. For this reason it is appropriate to give the guarantor the possibility to avoid this happening.
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