However, it is often the case that borrowers cannot take out a car loan without a guarantor. This situation arises when the credit requirement is not in line with personal creditworthiness. Futher reading at http://www.web8341.info/2020/01/02/uk-bad-credit-car-loans-who-has-the-best-car-loans-for-bad-credit/
The guarantor therefore benefits both sides – the lender and the borrower.
Most credit institutions approve a car loan with a guarantor without any problems and even at very low interest rates. Despite free credit selection – thanks to the guarantor – it is also worthwhile to consider alternatives.
The credit comparison shows you suitable car loans, with and without a guarantor. Apply for your desired loan right now – without any obligation.
Advantages – what does the guarantor bring?
A guarantor always represents additional security. Basically, its creditworthiness supports secure lending. Even if the borrower has a good credit rating, any loan is still a risk for the bank. Finally, it cannot be ruled out that solvency will change in the future.
With a good guarantor on the side of the borrower, on the other hand, the chances of the money coming back are doubled. In line with the additional loan security, practically every bank reduces the borrowing rate.
Car loan with guarantor – why?
Auto loans are usually accompanied by relatively high loan amounts. In the case of new cars in particular, tens of thousands of USD are quickly requested. With such large loan amounts, which also have a long term, the banks always see a large risk of default. Therefore, they want comprehensive protection.
A surety can offer this protection. The bank almost automatically expects the vehicle letter and the transfer of ownership of the vehicle to secure the loan.
However, the vehicle only provides limited security. Because:
- it doesn’t pay the installments
- is worth less every day
- can fail entirely as security in the event of an accident
Car loans are therefore often given in such a way that a guarantor is liable for the loan as a second person. The borrower benefits from being able to expect very good conditions from the banks.
Where can I get a car loan with a guarantor?
Many car dealers offer a car loan with guarantors. Most banks in Germany do the same. The largest offer can be found at the banking houses. There are more than 2,000 of them, all of which are able to provide a loan.
With our loan calculator, the borrower is in a position to compare these offers quickly and without effort. The software also works “intelligently”. If she knows the individual facts, she automatically shows only the right loans. This saves time, disappointments and automatically leads to optimal financing.
At the same time, the comparison calculator makes it possible to directly compare car loans with and without guarantors. If the cost advantages with guarantors are only slight, applying for a loan without a second liability is worthwhile.
When would you prefer to be without a guarantor?
So far, there has only been talk of the advantages of a loan guarantee. The solvent guarantor improves credit opportunities when the bank sees problems. The bank is happy to grant the loan because the guarantor is liable. The borrower has advantages with the interest and gets his car loan with guarantors quickly.
But where are the advantages for the guarantor? Finally, he is fully liable for the loan. For this he neither gets a car nor thanks the bank on his knees for his selflessness. On the contrary, if he needs credit himself, his creditworthiness suffers from the guarantee.
If the borrower does not pay his installments, the bank will tighten the thumbscrews. The guarantor may have to put a lot of strain on his own household budget to prevent worse things from happening. There are no advantages for the guarantor, only disadvantages. It is therefore always advisable not to use this form of credit protection.
Carrying out the loan comparison once without and once with a guarantor shows which loan offers actually fit the situation. Helping each other to provide car loans with guarantors can be just as right as loans without guarantors.
Just to save a few USD is at least not worth getting a guarantor on board.