This morning, we are tackling an important aspect of your credit application: guarantees. In some cases, the borrower will have to match his request for collateral credit. Sometimes, it is the obligatory signature of her husband (her) or that of her cohabiting partner. In some cases, the guarantees presented by the borrower could prove to be insufficient and it would then be necessary to attach the credit request to additional guarantees. In the field of guarantees: we will distinguish between real and personal guarantees. In a second part we will deal with the assignment of receivables and finally we will end with the guarantee. This trilogy of articles will give you a synthetic and complete view of the concept of credit guarantee.
The concept of guarantee
Lender activity is of course not without risks: when the lender cannot repay its debt, the bank could incur a loss. In addition, it sometimes happens that a client does not present all the guarantees required for a credit and that it is necessary for a third person to sign by his side (spouse, cohabitant, parents, sureties).
The function of guarantees – also called “sureties” for the lender is to reduce the financial consequences of the risk of insolvency of a customer debtor. It allows him to recover all or part of his claim.
Legal forms and advertising
Most collateral requires legal forms of incorporation and publicity measures. For example, a bond for free, that is to say, a third party who commits to your side requires the drafting of a bond contract separate from the credit contract. Similarly, the constitution of a mortgage (real security) requires a notary deed (authentic deed) and is registered with the Preservation of Mortgages. Failure to comply with these formalities can completely destroy the value of security.
Types of guarantees
A distinction is made between real and personal sureties:
- The real security interests report to one or more specific movable or immovable property. For movable property, we generally speak of pledges and for immovable property, we mainly refer to mortgages.
- Personal security involves the commitment of a third party, a person who serves as security. These are essentially the bonds.
Match your credit request with a guarantee
A customer who has submitted his credit request may sometimes be refused a first: in this case, it may turn out that the solvency guarantees presented by the customer are insufficient.
In this case, our brokers will work with you to find solutions:
- Thus, in the case of a couple married under the separation of property regime: if one of the spouses wants to make a loan to buy their own property, they may be asked to add the signature of his husband;
- Similarly, the borrower could rely on the recourse of a third person as personal security.
These guarantees will be able to fundamentally change the profile of the borrower’s file and thus can favorably facilitate acceptance of the credit application.