Debt is no longer a rarity in today’s fast-moving world. Everyone wants to live a good life and “belong”. Go on vacation, have a chic apartment and a great car and use the latest smartphone. However, this consumption, which is encouraged by the wide range of possible uses, means that many consumers become indebted at some point in their lives. They are no longer in control of their spending, can no longer pay their debts, and continue to move towards debt faster and faster. Once this has occurred, there are hardly any ways out of the vicious circle. It is therefore important that a reaction is made in advance in order to save what can be saved.
If the debt can be identified in good time, a debt rescheduling with guarantors can be seen as an escape from the impending debt. However, in order for this debt restructuring with guarantors to succeed, it is important that the response is not only timely, but also correct.
The reasons for debt restructuring with guarantors
Debt restructuring with guarantors is the last straw for many consumers to hold onto and that will keep them from ruin. The debt rescheduling may become necessary because old installment loans or consumer loans that have to be paid at the moment are subject to unfavorable interest rates or represent an excessive monthly financial burden. If this already leads to the fact that the payment obligations associated with the loans can no longer be met, you have to react particularly quickly.
On top of that, the overdraft of the checking account, the full use of the overdraft facility, open invoices and the threat of insolvency are very common reasons for rescheduling. Also an existing real estate loan, which is to be provided with follow-up financing through a new loan.
The most important key data for a debt restructuring with guarantors
If you want to reschedule debt because existing loan agreements are too expensive or there are too many of them, you will first find little understanding and mutual love from the lending banks that provided the loans. Because they see the money, which they earn with the help of the interest, always wane. It can therefore happen that the loans can only be redeemed early with a financial surcharge. In addition, the banks may have notice periods for early redemption. These can be up to six months.
It will be a little easier if the new loan is taken out from the bank that is already servicing the old loans. This means that less money is lost for the bank and the customer is retained. If the conditions offered for the new loan are better than for the old loan, there is nothing to prevent debt restructuring within the bank.
Why debt restructuring with guarantors and not without guarantors?
There are several good reasons for a debt rescheduling involving a guarantor. On the one hand, the guarantor helps get better loan offers from the individual banks. The banks and savings banks are always happy when several people take out a loan together, as they also have several contacts if there are problems with the repayment. And even if the guarantor is not a second borrower, he is liable if the actual borrower becomes insolvent.
But there are also advantages for borrowers if a guarantor is included in the debt restructuring. It increases his credit rating, which in turn will have a positive impact on the annual percentage rate. The loan is cheaper and the monthly installments are lower. And as long as the loan is serviced regularly and in full, there is no risk for the guarantor. This is because the bank will only ask the cashier if there is really nothing to get from the actual borrower.