Know the guarantees of your loans or credits

29/03/2022

Financial institutions always analyze the solvency of the applicant for a loan to ensure their ability to pay the debt, that they will recover the principal plus interest, the basis of the banking business. And in this analysis, the guarantees are examined in detail. All loans are backed by the debtor's personal guarantee, which means that the debtor responds with all his assets, present and future, of the debt contracted. It is not necessary to prove the possession of specific goods, but it does justify a usual income with which to face the payments.

An entity may also request a collateral: in this way, the payment of a specific debt is answered with a specific asset (usually owned by the debtor), free of charges or encumbrances. In case of defaults, the lender can enforce this guarantee, initiating a process that will end with the auction or sale of the affected goods

• Mortgage guarantee: responds with a property, often the same one that is acquired with the amount lent.
• Pledge guarantee: in this case, the guarantee is usually shares, jewellery, taxes, etc.

A professional appraisal must always determine the real value of the guarantees, both mortgages and pledges.

Collateral is always additional to the person of the borrower, who always exists, and institutions usually request it in case of high-value financing, such as the purchase of a home. Consumer loans, however, usually have only the personal guarantee associated with them, and therefore have higher interest rates.

In addition to these guarantees, institutions may require the guaranteeAbre en ventana nueva of a third party that supports with its assets the debtor's compliance with its payment obligations.