Receipt of loan debt from a guarantor. Legally. Is it possible to claim the amount of repaid funds?

Quite often, when applying for a loan, borrowers are faced with a situation where their own income is not enough to obtain the required loan amount. In this case, banks usually recommend attracting loan guarantors, promising clients a lower interest rate, reduced commissions and other bonuses.

From the point of view of a financial organization, attracting guarantors is beneficial because it reduces its risks. But on the part of most citizens, a guarantee is still perceived as nothing more than a simple formality that does not require anything from them other than the recommendations of the borrower. How true is this, what is the responsibility of the loan guarantor, and how to insure yourself against troubles by deciding to take such a step - we will try to understand this in our article.

Who is a loan guarantor?

The law defines a guarantor as follows: p guarantor- this is a certain citizen or organization of any form of ownership that is responsible to the bank for the timely and complete fulfillment by the borrower of the obligations imposed on him by the loan agreement. All the nuances of the relationship between the guarantor and the bank and the borrower - terms, responsibilities, rights and obligations - are prescribed in a special guarantee agreement, which comes into force immediately after signing by all parties.

If the borrower requires 2-3 guarantors to obtain a loan, a corresponding agreement is signed with each of them. In this case, any guarantor bears full responsibility to the lending organization.

Important! According to the requirements of the law (Article 361 of the Civil Code of the Russian Federation), guarantors do not have the right to claim funds received by the borrower in the form of a loan, as well as property acquired with these funds. However, in case of late payment or refusal of the borrower to repay the loan, it is the guarantors who will be responsible to the bank for this loan at the expense of their own property.

Who can be a guarantor for a loan?

Requirements for guarantors vary depending on the bank and the specific loan product the borrower wants to use. As a rule, the main points that a credit institution pays attention to are:

• age– at least 18 years of age at the time of receiving the loan and no more than 65 years at the time of expiration of the loan agreement;
• Russian citizenship, presence of registration in Russia or the region of operation of the bank;
• having a permanent income for at least six months;
• good credit history.

Everything else remains at the discretion of the bank. Thus, some financial organizations do not allow close relatives and spouses of the borrower to act as guarantees; others, on the contrary, are required to register spouses as co-borrowers. Specific requirements for a loan guarantor should be found out from the organization in which you intend to take out a loan.

Important! Despite the difference in requirements, the guarantor’s obligations remain unchanged, regardless of the creditor bank and the loan product purchased by the borrower. They are regulated by the Civil Code of the Russian Federation, which is strongly recommended to study before agreeing to act as a guarantor for anyone.

Liability of the guarantor and possible risks

The surety agreement may provide for one of two types of liability. The first one is joint responsibility– assumes equality of responsibilities of the guarantor and the borrower. In this case, the bank may impose sanctions on the guarantor at the first delay in the borrower’s payment of the next installment. Responsibility of the second type - subsidiary– occurs only when the borrower is unable to further fulfill his loan obligations, and this fact has been proven in court.

Important! As a rule, most banks, by default, provide for joint and several liability in the guarantee agreement.

Thus, if the borrower violates the terms of the loan agreement, the bank has every right to request each guarantor to perform the following actions:

• pay the principal amount;
• repay interest on the loan;
• pay all fines and penalties;
• pay the bank's legal costs.

Debt repayment can be carried out both at the expense of funds, in cash and non-cash form, and at the expense of the guarantor’s property. Only real estate can remain inviolable, and only if it is the only home of the guarantor and was purchased by him with a mortgage. Otherwise, the bank’s rights are not limited: it can not only seize any property, but also seize the guarantor’s accounts and oblige his employer to transfer part of his salary to repay the loan debt (no more than 50%).

An important point - The guarantor's liability in case of non-payment of the loan by the borrower remains even in the event of death. If the guarantor dies before the end of the loan term, his responsibilities pass to his heirs. True, the bank does not have the right to touch the latter until the date of their inheritance, that is, within six months after the death of the testator. This once again proves that guaranteeing is a rather risky step that can greatly ruin the life of not only you, but also your loved ones.

Pitfalls of surety

In addition to financial risks, the guarantor, if the borrower is dishonest, receives a damaged reputation. This is not about the opinions of friends and acquaintances, but, quite simply, about credit history. The borrower's late payments are also taken into account in the guarantor's credit history. Even if you pay your own debts in full, the negligent attitude of the person for whom you act as a guarantor for the loan can greatly complicate your obtaining loans in the future.

But even if the borrower makes all payments on his loan in good faith, you may encounter difficulties when taking out a loan. While the guarantee agreement is in force, your credit limit will be assessed by any bank taking into account the obligations under this agreement. That is, the amount of the monthly payment for the loan for which you act as a guarantor will be automatically deducted from your income, and the bank will determine the possible amount of the loan for you based on the remaining funds. If the need for a loan is critical, you can remove yourself from the status of a guarantor, but this will require not only the consent of the borrower, but also, first of all, the consent of his lender.

Duration of the guarantee

How long do the obligations of a loan guarantor last? This is determined by the guarantee agreement or the civil code. Usually, the agreements indicate a clear term that coincides with the validity period of the loan agreement. But exceptions are also possible, in which the Civil Code of the Russian Federation should be used to determine the duration of the guarantee.

1. If the contract does not indicate a period, the guarantee is terminated if there are no claims from the bank against the guarantor within a year from the date of payment.
2. If the payment period is not specified in the agreement, the guarantor’s obligations end after two years, provided that during this period no claims were received from the bank against the guarantor.
3. If the bank changes the terms of the loan without notifying the guarantor and obtaining his written consent, the guarantee is terminated automatically.
4. If the borrower was an organization and it is liquidated, the obligations of the guarantors end.

The statute of limitations for such cases is three years - this is important to remember.

Also, the duties of the guarantor are considered completed if the borrower of the loan changes. This can happen for a variety of reasons, but most often - in the event of the death of the borrower. In such a situation, credit obligations pass to his heirs, that is, they become new borrowers, and the guarantor can consider himself free. It is important to understand this because banks often try to retain loan guarantors and invite them to sign a new agreement for responsibility for the outstanding loan, presenting this action as a mere formality. Remember, you are not obliged to sign such a document, and no one can force you to do so.

Important! If the borrower's spouse acted as a guarantor, his obligations remain even after the divorce.

How to mitigate the liability of a guarantor

So, if you are a guarantor for a loan, you are responsible if the borrower fails to pay the required installments. What should you do first if the bank starts making claims against you? First of all, you need to try to find the borrower himself and find out his financial situation. If payment delays are associated with temporary financial difficulties, and in general your loan partner does not refuse his obligations, try to help him solve the problem as much as possible. You can find him a job or part-time job, or deposit the required amount for him in the bank (this, after all, is your responsibility as a guarantor).

Important! Even in the case of a one-time payment of a contribution to the bank instead of the borrower, try to obtain a document confirming that the contribution was made from your funds - a receipt, receipt, etc.

If you cannot help financially, go together with the borrower to the bank and talk with the credit manager. Today, credit institutions are ready to help their clients cope with late payments. You can agree on a credit holiday, a short deferment, or loan refinancing. Naturally, these negotiations must take place with the participation of the borrower.

The borrower has disappeared from sight and is deliberately neglecting his payment obligations, and you are the guarantee for the loan - how to avoid liability in such a situation? Start with a visit to the bank. To begin, check with the credit manager about the specific requirements of the financial institution for you and find out the exact amount of debt. All this information must be supported by relevant documents.

Next, if you have such information, tell the bank where you can find the borrower or how you can collect the debt from him. Often citizens have unofficial sources of income, hidden property, etc. Also try to draw up an application for debt restructuring or at least deferment of payments. All this, among other things, will help you gain time to solve the problem and convince the bank of your trustworthiness.

Important! Remember that the bank has every right to demand that you repay the loan taken under your guarantee. Therefore, do not conduct the dialogue aggressively, try to talk in a constructive manner, clarify for yourself all the possible options and suggest an alternative to the bank.

If you receive a deferment, you can try the following:

• find the borrower and bring him to justice;
• challenge the guarantee agreement in court;
• get rid of your property by transferring it to a trustee;
• get rid of official income.

These actions will reduce your property risks. In addition, remember that any property acquired by you during marriage is considered joint property, and cannot be seized by the bank to pay off the debt in this case. Try to collect documentary evidence of the timing of the purchase of the most valuable and large properties.

Rights of the guarantor

In addition to a huge number of responsibilities, a surety agreement gives you a rather important right. According to it, you essentially become the borrower's lender. When paying his debts, even in a small amount, for example, in the amount of one payment, you have the right to recover your own costs from him. That is why, even with a good relationship with the borrower, any assistance to him in repaying the loan must be documented. If the borrower has disappeared from view, but he still has some property (car, real estate, etc.), you can sue them in your favor after you have dealt with the bank. This will help cover the costs incurred, and the presence of the borrower himself is not at all necessary for such a court.

A loan guarantee is one of the main mechanisms that ensures that the borrower fulfills its obligations to the bank (or other lender).

A guarantor is an individual or legal entity whose function is to repay the debt for the borrower in the event that the latter fails to fulfill the loan agreement.

What it is

A loan guarantee is a form of security for loans, including bank loans.

Essentially, both parties (guarantor and borrower) bear equal responsibility.

If the borrower violates the terms of the loan agreement, the guarantor fulfills all the terms of the agreement for him. Moreover, it is expected to repay not only the principal amount of the debt, but also interest, penalties, commissions, fines and other payments related to lending.

In lending practice, two types of guarantees are used:

• blank, implying a general guarantee to the bank, without specifying specific property;
• property, means the registration as collateral of specific property owned by the guarantor.

From the point of view of the guarantor, the blank option is less dangerous, since in this case the guarantor does not risk anything specific. But at the same time, if liability occurs, any property may be recovered from the guarantor in court.

A loan guarantee is not the main point in lending, but at the same time it is a very significant lever that allows the bank to reduce its risks and, therefore, gain an additional chance to collect the debt.

Banks prefer to issue guarantees for long-term contracts:

• consumer loans for large amounts (from 1 million rubles) and long periods (from 3 years);
• car loans;
• guarantee for a loan for an apartment or other real estate (mortgage).

Often, to reduce the risk of non-repayment, banks allow the involvement of two or more guarantors. In particular, this practice of securing a loan is found in Sberbank.

Video: what is a guarantee

Requirements

Each specific lender puts forward its own requirements for a guarantee, which are based on a specific lending program.

But at the same time, there are general criteria applicable to the selection of a guarantor:

• A legal entity or an individual can act as a guarantor. From the bank's point of view, the ideal guarantor for an individual is his employer. And for a legal entity - the director or founder of the organization.
• For married persons, the second spouse often acts as a guarantor.
• The possibility of involving any third party as a guarantor cannot be ruled out.

For the bank, the main condition for approving a guarantor is:

• sufficient financial condition to service the borrower’s loan;
• the presence of liquid property in the property, which becomes collateral to secure a loan.

The bank has the right to check the credit history of the guarantor. The presence of debts, previously issued and current guarantees, and outstanding debts are all reasons to refuse to engage a specific guarantor.

Documentation

In most cases, the guarantor must provide the lender with a package of documents similar to those of the borrower.

At a minimum this is:

• passport of a citizen of the Russian Federation;
• documents confirming sufficient solvency (for example, salary certificates, tax returns, financial statements for legal entities, etc.).

When registering a pledge, the guarantor presents documents confirming ownership of the pledged property.

How to register

The loan guarantee is secured by the agreement:

• two-way, signed between the creditor and the guarantor;
• tripartite, is concluded between the bank, the borrower and the guarantor.

Additionally, if necessary, a collateral agreement is drawn up. Specific forms of agreements are established by each creditor separately.

What does the guarantor risk?

The main danger for the guarantor is the borrower’s termination of fulfillment of its obligations under the loan agreement. In this case, the creditor has the right to “switch” to the guarantor and collect the debt from him.

Thus, regardless of the reasons why the borrower does not pay the loan, the bank will take the easiest path - it will make demands on the agreement to the person who vouched for the borrower.

In case of refusal to repay someone else's loan, the bank has the right to go to court. And we must admit that the court will most likely be won by the creditor.

Unfortunately, many people do not think about the dangers and consequences of a guarantee. But in fact, this is almost the same as taking out a loan in your name.

The guarantor has the opportunity to protect himself. To do this, he can conclude a separate, independent from the bank, agreement with the borrower. This document stipulates all the conditions for returning money to the guarantor if it is spent. Such an agreement is a kind of incentive and disincentive for the borrower.

Paying off debt

According to paragraph 1 articles 363 Civil Code of the Russian Federation, the borrower and the guarantor bear joint liability for the loan taken, unless otherwise provided by the terms of the guarantee agreement.

Thus, if the borrower has not made the next payment on the loan or the amount of the contribution is insufficient, then the function of repaying the debt passes to the guarantor.

Payment of other payments

The situation with other payments is regulated by clause 2 articles 363 Civil Code of the Russian Federation. The law states that all losses of the bank resulting from a violation of the loan agreement also pass to the guarantor, provided that they are not repaid by the borrower.

Such losses include:

• payment of accrued interest on the loan,
• fines,
• costs associated with litigation,
• fines and so on.

Marks in credit history

Any violations of the schedule, terms and volumes of debt repayment on the part of the borrower directly affect the credit history of the guarantor.

This entails entering negative information into the CI, which promises problems in the future if the guarantor decides to take out a loan himself.

Difficulties in getting a loan for yourself

A guarantee in the eyes of the bank is a loan obligation assumed by the guarantor (guarantor). Therefore, the presence of a guarantee is one of the obstacles in obtaining a loan for one’s own needs.

When assessing the creditworthiness of the guarantor, the bank is forced to take into account his ability to repay two loans. Therefore, the lender may consider the level of solvency of the guarantor insufficient and refuse to obtain a loan for itself.

Video about responsibility for the borrower

Rights

In addition to fairly strict responsibilities, the guarantor has a number of rights:

• Fulfill only those obligations that are specified in the guarantee agreement. For example, if it states that guarantees apply only to the body of the loan and interest on it, then the guarantor should not pay fines, penalties and other payments.
• The guarantor can present his claims to the bank in case of violation of the terms of the loan agreement (Article 363 of the Civil Code of the Russian Federation).
• The right to demand documents confirming the repayment of debt and penalties by the guarantor. Based on these documents, the guarantor has the opportunity to demand compensation for damage from the borrower, since all loan obligations are transferred to him (Article 365 of the Civil Code of the Russian Federation).
• To protect his rights, the guarantor can apply to the courts.

Is refusal possible?

Often the question arises before the guarantor: “How to refuse the issued guarantee?” Unfortunately, it is almost impossible to cancel an assumed obligation under a surety agreement ahead of schedule. This provision is enshrined in Article 367 of the Civil Code of the Russian Federation.

The only chance is refusal with the consent of the borrower and the bank. But for this it is necessary to attract a new guarantor for the loan, who will agree to take on the mission of the guarantor.

The decision to satisfy the request for refusal is made by the credit committee at the bank. The procedure is quite complex, so it is rare in practice.

To make a decision about assuming the obligations of a guarantor, you must have the following information:

• full lending conditions: loan size, terms, fines, commissions, repayment schedule, etc.;
• information about the borrower: who he is, where he works, marital status, level and sources of income, purpose of the loan, reliability.

The basic rule for a person who wants to become a guarantor is vigilance:

• You cannot sign blank forms;
• it is necessary to carefully check all the terms of loan and guarantee agreements;
• contracts must be numbered and the total number of pages indicated;
• Each page must be signed separately.

Additionally, you can protect yourself:

• having taken out insurance;
• by limiting the guarantee in time, to a specific amount, conditions for the borrower (travel abroad, sale of property, refusal to take out new loans, etc.);
• by requiring the borrower to provide regular reports on debt repayments.

FAQ

In what cases do obligations become invalid?

There are cases when the guarantee becomes invalid, but this is an extremely rare case.

For example, it may occur if:

• For some reason, the bank refuses to collect the debt directly from the borrower, but at the same time insists on repayment by the guarantor.
• Changes were made to the loan agreement, in particular regarding an increase in the loan amount, without the knowledge and consent of the guarantor.
• The loan was transferred to another person for whom the guarantor refuses to provide guarantees.

Is it possible to claim the amount of repaid funds?

In accordance with the Civil Code, after the guarantor repays the debt, the rights of the creditor are transferred to him. This allows the guarantor to make demands on the borrower for compensation for expenses incurred.

What happens if the guarantor or borrower dies?

There are two points of view on this situation:

• The Supreme Court of the Russian Federation argued its objections to the transfer of loan payment obligations to the guarantor in the event of the death of the debtor. The explanation is as follows: the provisions of the Civil Code regarding guarantees provide for the transfer of obligations in the manner of legal succession. This means that in this situation, according to Article 1175 of the Civil Code of the Russian Federation, loan obligations pass to the heirs.
• From another point of view, the bank has the right to demand fulfillment of the terms of the loan agreement from both the legal successors and the guarantor. Therefore, this provision regarding the repayment of the loan in the event of the death of the debtor must be separately described in the surety agreement. This will avoid double interpretation of the law.

If the clause providing for the obligation of the guarantor in the death of the borrower is not spelled out, then the heirs are responsible for repaying the loan debt.

To extend the guarantee, the guarantor's consent to change the borrower (in this case to the heirs) is required. Such consent may also be specified in a surety agreement. Or a new agreement is concluded.

If there are no heirs, the borrower's property, as well as his debt, passes to the state.

The situation is similar with the transfer of rights and obligations in the event of the death of the guarantor. That is, in the event of the death of the guarantor, his heirs, subject to entering into an inheritance, assume the obligations of the guarantee.

In both cases, repayment of the debt to the bank cannot exceed the limits of the value of the inherited property.

One way to increase your chances of getting a loan is to attract a guarantor: credit institutions are always more loyal to borrowers whose obligations are secured by guarantee agreements. Who can act as a guarantor, what requirements do banks place on him, and to what extent will he be responsible for the borrower’s failure to repay the loan on time? We will try to answer all these questions in this article, and also touch on the concept of “co-borrower” and consider how much having a co-borrower can increase your chances of getting a loan.

Guarantee from the point of view of the law. Responsibility and rights of the guarantor

The institution of suretyship was created and operates on the basis of the Civil Code of the Russian Federation (§5, Art. 361 - 367). According to Art. 361, the guarantor assumes the obligation to answer to the lender for the fulfillment by the borrower of obligations in whole or in part. The guarantee agreement must be drawn up in writing.

By default, this agreement assumes joint liability of the guarantors and the borrower in the event of failure or improper performance by the latter of its obligations. According to Art. 323 of the Civil Code of the Russian Federation, in case of joint liability of the guarantors and the borrower, the creditor has the right to demand performance both from all debtors jointly and separately from any of them, in whole or in part of the debt. Usually, when a controversial situation arises, the bank files a claim, in which the borrower and the guarantors are the defendants. The guarantor is liable to the bank to the same extent as the debtor and undertakes to repay interest, legal costs and other losses of the creditor.

In rare cases, subsidiary liability is provided (this must be specified in the contract). In this case, according to Article 399 of the Civil Code of the Russian Federation, the creditor must first present a demand for repayment of the loan to the borrower, and only then, if the latter cannot repay the debt, the demand will be forwarded to the guarantor.

According to Art. 365 of the Civil Code of the Russian Federation, if the guarantor fulfilled the obligation instead of the debtor, the rights belonging to the creditor are transferred to him in an amount corresponding to the amount of the repaid part of the debt. Simply put, if your guarantor repaid a certain amount of debt on a mortgage loan for you, then he has the right to part of the property that serves as collateral for this obligation. Also, the guarantor may demand from the borrower payment of interest in the amount paid by him to the lender, and compensation for other losses.

To present a claim to the debtor for the return of funds (for example, in order to file a claim through the court), the guarantor will need the following documents: an agreement on the assignment of a claim, an agency agreement; payment documents confirming payment of bank claims; copy of the loan agreement, etc.

It is important to know the cases when the guarantee may be terminated (Article 367 of the Civil Code of the Russian Federation). These include:

• making changes to the terms of the loan, entailing an increase in obligations or other negative consequences for the guarantor, if he did not give written consent to this;
• repayment or closure of a loan secured by a guarantee;
• transfer of debt to another person without the consent of the guarantor;
• refusal of the creditor to accept fulfillment of obligations from the guarantor;
• expiration of the period specified in the guarantee agreement. If the guarantee period is not specified, then the guarantee is terminated within 1 year from the date the obligation is due and provided that no claim is filed against the guarantor;
• if the deadline for fulfilling the obligation is not specified and is not determined by the moment of demand, the guarantee is terminated if the creditor does not bring a claim against the guarantor within 2 years from the date of conclusion of the guarantee agreement.

Having considered the legal aspects of attracting guarantors, it is important to find out how this type of security affects the possibility of issuing a loan, its size and rate. We will talk about this further.

Guarantee and its impact on lending conditions

Banks are always more willing to provide loans with guarantees in larger amounts. For example, Sberbank is ready to issue a consumer loan under the guarantee of one or two individuals in the amount of up to 3 million rubles without commissions and at very attractive rates. At the same time, without a guarantee you will not be able to receive more than 1.5 million rubles. (rates will naturally be higher). This bank takes into account the age and solvency of the guarantors and, depending on these indicators, indicates the number of required guarantors.

Note that when calculating the maximum possible loan amount, the bank does not take into account the income of the guarantor, and they do not in any way affect the size of the loan issued. However, the credit manager is obliged to make sure that the guarantor’s income is sufficient to repay the loan issued to the borrower - i.e. that the guarantor is solvent (most banking organizations use scoring). To do this, the guarantor is asked to provide the same set of documents as the borrower.

The credit history of the guarantor is also checked, and the same requirements are imposed on it as the history of the borrower (for example, if a bank refuses clients who have had 60+ overdue payments in the past, then the guarantor who made a similar delay in the past will not be allowed to will suit).

Even if the terms of the loan product do not provide for a guarantee, banks may still require the borrower to find a guarantor in the following cases:

• when calculating the borrower's solvency, borderline results were obtained (a minimal deterioration in the financial situation will not allow the borrower to repay the debt normally);
• the borrower does not have an ideal credit history;
• the borrower meets all the criteria, but the bank has unconfirmed reasons for doubt;
• the age of the borrower is from 18 to 20 years (in this case, a guarantee from a solvent parent or parents will be required);
• retirement age of the borrower (guarantee of solvent children is required);
• other cases.

A guarantee allows the bank to minimize the risks of non-repayment and fraud on the part of the borrower, including the risk of obtaining a loan using forged documents. Thanks to this, loans secured by a guarantee have more attractive terms.

Recently, in addition to a guarantee, the term “co-borrower” is often found among the characteristics of banking products. We will tell you further about what it is and what advantages and disadvantages this lending scheme has.

Co-borrowers: differences from guarantee, rights and opportunities

The co-borrower, like the guarantor, together with the main borrower is responsible to the bank for repayment of the loan in full and bears joint liability. However, from a legal point of view, it is easier for financiers to repay the debt at the expense of the co-borrower.

Co-borrowers are usually attracted when the borrower does not have enough personal income to obtain the required loan amount: when calculating the maximum loan size, the income of co-borrowers, unlike guarantors, is taken into account. Typically, co-borrowers are family members of the borrower (spouses, parents, children). One loan can involve several co-borrowers (usually up to 5). Each of them increases the possible loan amount in proportion to their confirmed income. If the borrower refuses to repay the debt, this responsibility falls on the co-borrowers.

Thus, the distinctive features of lending with co-borrowers are as follows:

• when calculating the maximum available loan amount, the solvency of the borrower and co-borrower is summed up;
• The co-borrower, together with the borrower, signs a loan agreement, accepting rights and obligations equal to those of the borrower. For example, with mortgage lending, the co-borrower receives the right to become a co-owner/owner of the purchased property (remember, the guarantor can only obtain this right by a court decision if it is confirmed that the loan has been repaid instead of the borrower);
• in case of delays in payment of the loan and interest on the loan, the obligation to repay passes to the co-borrower automatically, and not by court decision, as is the case with the guarantor;
• If a guarantor and a co-borrower are involved in the loan, then in the event of problems, claims will first be presented to the borrower, then to the co-borrower, and only then, based on a court decision, to the guarantor.

Regardless of whether a person acts as a guarantor or a co-borrower, he must remember some points and risks that he assumes.

Important to remember!

If a loan for which a person acts as a co-borrower or guarantor is not repaid on time, he, like the borrower, develops a negative credit history. In the future, banks may refuse him not only as a guarantor for another loan, but also as a potential borrower.

You should be thoughtful about guaranteeing and agree to act in this role only when you are completely confident in who you are guaranteeing for. The borrower is also advised to carefully select guarantors and co-borrowers. In a critical situation, they must take on your obligations and fulfill them.

It should also be noted that many banks (for example, Sberbank) use a spouse’s guarantee as additional collateral for a loan. At the same time, breaking the marriage bond does not relieve the guarantor from liability in the event of failure to repay the debt by the main borrower.

Only a conscious, balanced approach to the issues of guarantees and joint borrowing of funds allows you to count on much better lending conditions with a minimum of risks for loved ones.

Some loan programs require the participation of a third party in the transaction, who acts as a guarantor. It may not even be one, but several people who vouch for the borrower. The presence of a collateral may be a mandatory condition for obtaining a loan, or the involvement of a third party is carried out at the request of the borrowers.

Why do you need a loan guarantor?

Most often, it is required when applying for a loan product with a large limit. For small amounts, a collateral is usually not required. For both the borrower and the bank, the guarantor has a certain role:

1. For the bank. This is an additional money back guarantee. If the borrower fails to fulfill his obligations stipulated by the loan agreement, the bank has the right to turn the foreclosure process on the guarantor. In this way, the bank receives more guarantees that the funds will be returned, and the lender himself will receive income. This is especially true now, when due to the population’s debt burden and the growth of overdue debt, banks prefer to play it safe.

2. For the borrower. He receives a more favorable loan offer. Thanks to the presence of a guarantor in the transaction, the bank has a greater chance of getting its money back along with interest, and the risk of non-repayment is reduced. And since banks include their risks in the interest rate, in this case it will be lower than under similar programs, but without the involvement of a collateral. In addition, the borrower can count on a higher lending limit.

What is a surety?

A guarantor is a person (people) who vouches for the borrower, or rather, that he will comply with the terms of the loan agreement and pay monthly payments on time. In this case, the guarantor takes responsibility for paying off the debt. In case of violations of the borrower, the bank turns to him specifically so that he pays the debt for the main borrower.

The guarantor is present at the conclusion of the loan agreement between the bank and the borrower, while at the same time a guarantee agreement is concluded between the bank and the guarantor. The guarantee agreement must indicate the details of the main borrower and what obligations the guarantor assumes.

Who can become a guarantor?

Banks put forward certain requirements for them, so not everyone can be suitable for a lender as a guarantor. he is subject to exactly the same requirements as the main borrower. So, this can only be an adult citizen, most often aged 21-23 years. He must be employed, and his income must be enough to repay the debt if the borrower does not repay the loan. This can be any individual, but banks give preference to relatives of the borrower. A legal entity can also act as a guarantor if the conditions for issuing a loan from a particular bank allow this.

The guarantor provides a certain package of documentation specified by the bank. Usually it looks like this:
- passport;
— a secondary document (licence, international passport, TIN, SNILS and others);
— certificate of income from the place of work. It is desirable that it be official, but some banks allow the provision of a certificate in the bank’s form. If there is an additional source of income, then it can also be confirmed by any documents;
- a copy of the work record book certified by the employer. It may be replaced with a copy of the employment contract.

Each bank is individual in its requirements for the guarantor and its documentation package, so it is impossible to talk about a single standard. When collecting certificates, keep in mind that they have a limited validity period. This could be two weeks or a month. It is better to collect documents at the same time as the borrower. If several guarantors are involved in the transaction, then a set of documents is required from each.

Responsibilities of the loan guarantor and types of guarantee

As already mentioned, the guarantor undertakes to pay the creditor instead of the borrower if for some reason he stops paying the debt. But exactly how this will happen and when creditors will turn their attention to the guarantor depends on the type of guarantee and responsibility.

1. Joint responsibility. In this case, the guarantor bears exactly the same responsibility for repaying the loan as the borrower himself. As soon as the main debtor committed a violation in payment, delayed payment, the guarantor begins to be disturbed immediately. The entire collection process is directed to both parties to the transaction at once; representatives of the bank's collection service and collectors will also visit the guarantor. In the future, the bank will sue the guarantor and the borrower directly, and then the bailiffs, after the decision has entered into legal force, will begin to collect the debt from both the guarantor and the borrower.

2. Subsidiary liability. In this case, the bank turns to the guarantor only if all attempts to collect the debt from the debtor have been futile. If he does not have the funds to pay off the debt, or he has completely disappeared from sight.

It is clear that for the guarantor, subsidiary liability is more painless, but banks still often practice joint and several liability, because it is more reliable for the creditor, funds can be recovered much faster. But in any case, the guarantor will be held liable if the borrower does not repay the loan. In this case, liability involves the collection of the principal debt, as well as interest and fines accrued for the entire period of collection and non-payment of the debt by the borrower. That is, the guarantor must pay back in full what the borrower cannot return. The legal costs of the bank (collection agency if the debt is sold) are also subject to compensation.

Rights of the loan guarantor

In addition to the large burden of responsibility, the guarantor, according to the law, is also endowed with a number of certain rights. The bank has the right to collect the loan debt from the guarantor, but if the guarantor has made a payment on the loan, then the rights of claim are transferred to him. That is, the collateral closes the debt, but after that he has every right to go to court to direct the collection to the main borrower.

To do this, after repaying someone else’s loan, you need to contact the bank, which will issue the guarantor a document stating that he has repaid the debt, and you should also take from the bank all the documents that relate to this loan agreement. Now the guarantor has the right to demand money from the borrower, so the bank has no right to refuse to provide him with a package of documentation.

Based on these documents, you should draw up a statement of claim yourself or with the involvement of a lawyer and send it to the court. But the fact is that since the money was taken from the guarantor, it means that the bank has already tried to collect the debt from the main borrower, and it did not work. So, you will have to be patient to get your money back.

There are a number of other situations when the bank loses the right to demand payment of the debt from the guarantor. Namely:
- the bank, without the knowledge of the guarantor, transferred the debt to third parties for collection. That is, if he sold the debt to collectors. This action is unlawful; the bank is obliged to warn about the transfer of debt. If an illegal act has been committed, the guarantor can relieve himself of the obligation to pay the debt;
- if the bank changed the terms of the loan without notifying the guarantor about it. The situation is similar to that indicated in the first paragraph;
— the main borrower died;
- the period specified in the guarantee agreement has expired.
In these situations, the guarantor can go to court and relieve himself of the burden of paying someone else's debt.

Guarantor's credit history

A guarantee also threatens to damage your credit history. Since the collateral is responsible for paying off the loan debt to the bank, this information is reflected in the citizen’s credit history. If the debt is overdue, and the guarantor is in no hurry to close it instead of the borrower, then this is indicated in the dossier, which is stored in the BKI. The credit history deteriorates, and in the future it will be very difficult for the guarantor to get a loan for himself (read more about what a bad credit history entails). So, you should be careful about this aspect.

The difference between a guarantor and a co-borrower

Often citizens mistakenly consider these words to be synonyms. But this is not true; although the guarantor and the co-borrower often bear identical responsibilities, they have completely different rights. The guarantor can be said to have no rights. He does not receive credit funds, but he has a mountain of responsibility. He receives no benefit from participating in the loan processing at all.

And the co-borrower shares with the main borrower not only the rights to repay the debt. He has exactly the same rights to the subject of the loan itself. Most often, co-borrowers are involved in a targeted loan; subsequently, they have the same rights as the borrower to the property that was purchased with loan funds. The guarantor does not have such rights.

Before agreeing to act as a guarantor, you should think ten times whether you need it. The guarantor has nothing, but at the same time takes upon himself the obligation to repay a completely different loan. And if you consider that a guarantee is usually used with large lending limits, then there is a large credit risk.

In case of non-payment of debt based on a court decision, the same measures may be applied to the guarantor as to the main borrower. This includes deduction from wages of up to 50%, seizure of bank accounts, seizure of property and restrictions on traveling outside the country (we strongly recommend reading about). Think about whether it's worth the risk. Be sure to analyze the financial condition of the person who asks you to act as a guarantor.