All about Loans Without Guarantor
The guarantor is the person who can, in some cases, be requested by the Dispensing Institute for example if you want an immediate loan without guarantees or if you do not have a paycheck, if you are a housewife, unemployed or newly hired young apprentice or if the Your work contract is fixed-term.
The guarantor of your loan is the person who, with his intervention in case of unpaid installments, will avoid you being registered with the end-to-end knowledge company (Centrale Rischi Finanziari SpA) as a bad payer.
Who is the guarantor of a loan?
The guarantor of a loan is the person who pays the installments of your loan in case you are unable to do so.
In some cases, the lending institutions (banks, established credit and financial) require an extra guarantee for additional security that the loan installments are paid on time. In practice, the guarantor is the person who will save your creditor as you will not be able to do so.
Before accepting a guarantor, the granting institution ensures that it is solvent, that is, it is able to meet all your unpaid installments.
To assess the suitability of a guarantor, the creditor evaluates its real estate properties, monthly income and available funds such as shares and bonds.
The guarantor must be of age, must prove to be able to cope quickly with the rate or installments that you have not paid.
Once you have not paid the installment of your loan the creditor turns to the guarantor and this is required to pay the installment for you. At this point the creditor is satisfied and will not ask you anything, except for the next installments of your loan. Having paid for you, the guarantor has a credit to you and can either ask for money or, as often happens, not rival you and it is as if he had given you a gift and given you free money.
The guarantor and guarantees in the assignment of the fifth
For this type of financing there is no need for reasons, that is, once the money has been paid into the current account the customer can spend them as he sees fit without giving any justification to anyone.
A further convenience of the transfer of the fifth is the certainty of paying the installment without delay and this allows not to run any risk of being registered with the end-to-end knowledge company and become bad payers.
Unlike the assignment of the fifth the guarantor of your loan or your loan is the person who will pay for you the installments that you have not been able to pay. It is a further guarantee for the bank on your loan, or who lends you the money takes care to have a further certainty that these are returned in the time and manner agreed in the contract.
It is a well-established practice that banks require a guarantor if the applicant is a young person who has just started working, if he is unemployed, if he is recently employed or if he does not have a paycheck.
In technical jargon the financial and economic soundness of the applicant is assessed, that is, he decides how much is the risk of giving him a loan and how many chances are that this will be returned. These decisions are made by evaluating many aspects of the life of the applicant, sometimes even the state of health of those who request the loan.
The final decision is based on statistical tables that guarantee objectivity and non-discretion and tend to minimize subjectivity as much as possible.
Often the loans with guarantor are finalized, that is to give justification of how the money will be spent and to document this output is required, in some cases a quote for example of the car dealer or the building company that will take care of the renovation works of your own home.
Why can I need a Guarantor for my loan?
If you are a permanent employee, whether you are employed by a private company, either a state or a parastatal, you do not need a guarantor to get the fifth of your salary.
The guarantee of your loan is your severance pay or your pension that is assessed as a very secure guarantee in the eyes of the creditor because it is managed by the State.
A guarantor may be required in the case you are an unemployed person or a young worker or an apprentice. In addition, the guarantor is present in almost all the loans aimed ie in those loans that have as purpose a precise expense, or the applicant certifies that the money will be spent to pay the car dealer, the construction company, the dentist or the doctor.
In the justified loans it is not possible to use the sum obtained for other expenses because the credit to the current account, in most cases, will be made directly by the bank to the creditor.
In response to the question then you can say that in case you want money to spend without giving any justification the solution is the assignment of the fifth without guarantor, while if the amount you need to meet a precise and certified expenditure the guarantor will be required if your financial position is not sufficiently robust, for example if you are employed in a company that is at risk of bankruptcy.
Who can be the guarantor of my funding?
A relative, a friend, an adult cohabitant… it does not matter to the Entree Creditor the existing relationship between guarantor and loan applicant.
The only factor that the bank evaluates is the ability of the guarantor to cope with the non-payment of the installment with his money, then the guarantor will be assessed only its financial and economic capacity.
In the event that the guarantor is an employee, he evaluates his paycheck: can part of his monthly salary cover the cost of the installment?
A guarantor can also be a self-employed person, in this case the declaration of income and economic capacity will be assessed.
For self-employed people we mean both those who own a company, a shop or a professional studio, and those who perform all those professions that for the tax revenue are different income such as artists, writers, musicians or actors.
In case you ask a pensioner to act as guarantor for your loan the speech does not change: is it able, for example your grandfather, with his pension to pay the installment expired in your place?
It should be noted that very often a guarantor is required to those who do not have a stable, lasting and demonstrable income such as for example a loan to a housewife, a bad payer, someone who is in arrears, registered with the end-to-end knowledge company, an unemployed person, or a newly hired young apprentice.
Does the Assignment of the Fifth Require an Guarantor?
The substantial difference between guarantee and guarantor is that the former is a sum of money (of shares or stock market securities for example) or a property like a house or a shed; the guarantor is a person instead.
In the assignment of the fifth of the salary or pension, no guarantor is required because this type of financing has an upstream guarantee that is constituted either by the TFR in the case of an employee, or it is the State itself in the case of a pensioner.
Another type of loan that does not need a guarantor is the loan that has been changed because in the event of failure to pay an installment, the debtor’s assets are seized.
Not only in the eyes of the creditor a loan with the assignment of the fifth is the safest, but also for the debtor the assignment of the fifth is the best option because:
- Even if the guarantor can not refuse to pay the outstanding installment, contacting the financier of a loan involves additional costs for the bank and certainly additional bureaucracy. Not all loan applicants are in a position to address a guarantor.
- The same goes for the seizure of assets in the case of an unsecured bill, moreover it is very difficult for those who need money to be able to have a loan with bills of exchange.
- In the assignment of the fifth, the payment is assured by the employer and is made directly “at the source” without the debtor being able to refuse to pay. For this reason, the assignment of the fifth salary and pension is the type of financing that, given the same characteristics of the applicant, offers the latter to obtain a loan that includes the guarantee of life and risk of use.
What happens if I do not pay an installment of a non-guarantor loan?
The answer to this question is included in this guide on loans without a guarantor for the completeness of the explanation, in fact in the case of loans with assignment of the fifth is not the applicant that deals with the payment of the installment in first person, but demanda to the employer of work or to the pension institution the payment.
In the case of an unpaid single installment of a loan without guarantees or without a paycheck (either to housewives, unemployed, unemployed, young people, apprentices, new recruits or fixed-term workers), the loan holder will be called by the bank. Given the technical time of the bureaucracy, an installment paid late, but before the expiry of the next installment, does not in practice cause any problems.
Only in the case of 2 or 3 unpaid consecutive installments will you officially be registered with end-to-end knowledge company and you will be considered bad payers. It is important to know that the provision of loans to bad payers is a little more complicated than those who have no outstanding debts. Loans for bad payers can be either without guarantor or guarantor.
If the debt continues to not be repaid to the creditor, the latter has the right to take legal action with regard to debt collection. In good-bye terms, the debtor agrees with the debt collection agent on the methods and timing for extinguishing his debt.
In case even this attempt at a good-natured approach to mediation should fail, the creditor may request the attachment of the debtor’s assets.
The assets that can be foreclosed are all those registered or owned by the bad payer as for example:
- liquidity on the current account
- bank shares and bonds
- all income in general
What happens if I do not pay an installment of a loan WITH the Guarantor?
Obviously in the case of non-payment of an installment the bank will contact the guarantor of the loan to get the money.
The same applies in the case of a loan with guarantees. In this case the creditor will be back on the goods given as collateral to return to the possession of the amount paid.
Final Advice on Loans without a Guarantor
The assignment of the fifth salary is a type of loan that does not require a guarantor, the guarantee is the severance pay in the case of loans to employees of private companies and state and parastatal institutions or is the income from the pension in the case of financing with transfer of the fifth of the pension.
Loans without a guarantor can also be requested by:
- from those who do not have a paycheck
- from new employees
- from young people
- from apprentices
- from those who have a fixed-term contract
The outcome of the request for estimates for loans without a guarantor, without guarantees and without a paycheck is about 1 working day, ie 24 hours.