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How To Choose A Trusted Loan Guarantor

When you decide to take out loans in the Philippines, there is a possibility that you will not have a credit history to qualify for the loan you request. Nevertheless, with a guarantor, co-maker or co-signer, your eligibility increases; likewise increasing your likelihood to qualify for the loan amount you require.
If you are in a position that requires you to have a guarantor, you need to be sure that the guarantor you have chosen is willing to sign on your loan application and has your complete trust. The same applies to him – he needs to have complete trust in you too. In most cases, a guarantor is either a close friend or an immediate family member. However, in some cases, you could also ask your employer.

Listed below are some ways to choose a trusted and able guarantor when applying for loans in the Philippines:
Knowing His Capacity to Make Repayments
When naming a guarantor, you both need to be sure that you can afford to service the loan repayments and that your finances should take a downward turn. In many cases, the loan company may insist that your guarantor must be a homeowner, but this is not always the case.
Before choosing your co-signer or guarantor, you may want to obtain an accurate quote from your loan provider or bank of choice. An accurate amount is necessary in ensuring that your guarantor will be able to make the repayments, in the event that you are unable to.
Solvency also applies to you. By remaining financially solvent, you have less need for a guarantor. After the initial period of your loan, you will be able to refinance your loan without the need for a co-signer.
Knowing His Willingness to Pay Your Loan
Mutual trust between you and your guarantor is essential to a successful loan agreement. Your guarantor has to have absolute trust in you and your ability to maintain your payment schedule. Moreover, you also need to trust them to uphold their agreement to pay if you become unable to.
The guarantor should also have trust in you. You might be unable to continue payments with the loan due to business collapse, unemployment, illness or death. They need to trust that you will make arrangements to recompense them for continuing to service your loan agreement. It is inconceivable that you might be ill and die while still expecting that your guarantor will continue to pay your loan without any chance to recompense. Likewise, if you should lose your business or your employer makes you redundant, you will be unable to pay your mortgage. Your guarantor needs to know that you will reimburse them for the payments they continue to make on your behalf.
Knowing His Respect for the Loan Agreement
Respect – yours for your guarantor and theirs for the loan agreement they sign on – is vital to the success of your loan partnership. If you are asking a family member or a close friend to act as guarantor, you need to be very respectful of them and their finances. You need to make sure that you will do everything. You can stay solvent and maintain your payment. The loan arrangements may affect your friendship or your familial relationships if you do not maintain your end of the bargain. You need to have enough respect for your family and friends such that you won’t put their finances under strain when yours are.
If you have asked your employer to be your guarantor, respect is even more important. Moreover, you need to have respect for your employment status. While your employer acting as your guarantor may reflect their unlikelihood of letting you go, there are no guarantees in life.
When applying for guarantor-supported loans in the Philippines, you must ensure that the guarantor you choose is solvent enough to pay your loan, and you can trust them to respect the agreement. If you cannot find a guarantor that meets these criteria, it may be better for you to apply for a loan without the guarantor. A reference or introductory letter may make an adequate substitute for a co-signer on your loan, so inquire about this to your loan providers.
Trust and respect are essential to the guarantor relationship. You trust him to abide by the contract and he shall trust you not to skip out on your loan.