A loan for unemployed people with guarantors is not uncommon at direct banks and is often approved without a problem, provided that the citizen employed also has sufficient creditworthiness. The guarantor must therefore receive at least an average income on a regular basis, and a high Credit Bureau rating would be an advantage for the guarantee.
Why you need a guarantor
The unemployed, on the other hand, is completely dependent on the guarantor, because without him, borrowing is not possible, because he lacks income, because he has no way of repaying the loan with complete certainty and in time with all his costs. Therefore, the guarantee is a common means in Germany and abroad to increase one’s own credit rating over the term of the loan. Since the guarantor, unlike a co-applicant, has no share in the loan amount disbursed, the guarantee is only a risk for him, which is why guarantors usually come from close acquaintances or relatives.
As a rule, even good friends tend not to take advantage of the possibility of a guarantee, since the financial risk is always very high. However, if a guarantor has been found, there is nothing standing in the way of the loan for unemployed people with guarantors. In the following, the lenders must then be compared with one another and an ideal term must be found.
Good conditions thanks to a guarantee
The guarantee also serves to improve one’s own borrowing conditions. The bank always has to assess the risk of default on borrowers, which is why loans are never given to people with a high chance of default. The loan makes the loan possible because the guarantor is responsible for the debt of the borrower, but the monthly installments should not exceed the financial possibilities of the actual borrower.
Otherwise, the guarantor’s previous theoretical use will soon become a reality, since the bank’s guarantee gives it the right to have outstanding debts settled out of its hand. The loan for unemployed people with guarantors is optional, which means that the borrower and the guarantor can search for a provider who will issue the loan as cheaply as possible.
It is worth using a credit comparison, which compares the common (direct) banks on the market and quickly provides information about which provider is actually worth it according to its terms. Ideal for the loan for unemployed people with guarantors is the lowest possible interest burden and the waiver of any fees. If there are any processing fees, they should never be due in advance. Reputable lenders always forego advance payments.