Guarantee origination fee
When you ask your bank for a guarantee to secure a specific obligation, the bank will need to study your creditworthiness and analyse the possible risks of the transaction. This is why, when granting a guarantee, banks tend to charge an origination fee (for the guarantee) which is normally a percentage of the amount secured by the guarantee, with a minimum amount.
What requirements must your bank meet in order to charge this guarantee origination fee?
- Remember that the fees charged by banks are unrestricted, except in the case of certain fees that are limited by law.
- In the case of the guarantee origination fee, there is no limit, so each bank can establish the fee it chooses.
- Also, in order for the bank to be able to charge this origination fee, it must be expressly stated in the guarantee application document signed by the customer or the applicant, in which it must specify the fee amount and when it can be applied.