2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-07 20:55
Bank guarantee is another method of securing loans. In fact, it is a guarantee for the borrower. But the credit institution is responsible for it. The bank acts in the transaction as a person who gives a guarantee to the creditor (beneficiary). In case of default by the borrower (principal), the guarantor pays his debt.
As well as banks, insurance companies can also act as guarantors. The ability to issue such guarantees should be written into the service license.
A bank guarantee can be issued to both a legal entity and an individual (only if it is an individual entrepreneur). Consider the option with an individual.
Under what conditions can I count on a bank guarantee?
1. If you have an account with this bank and it is active.
2. If you have repeatedly taken loans from this bank, and you have a good credit history.
The guarantor issues a letter of guarantee to the principal. And he doesn't do it for free. The letter indicates the duration of the guarantee, the amount of money and the conditions under which it can be "activated".
Providing a bank guarantee is possible when collecting a package of documents according to the following list:
- passport copy;
- certificate of the amount of income received (for half a year);
- copy of work book;
- title documents for property owned (real estate, car, securities, etc.). If the bank guarantee is unsecured, then such documents do not need to be provided.
- TIN;
- SNILS.
The list may be supplemented depending on the requirements of a particular bank.
If a moment arises when the borrower does not pay the loan to the lender, the latter makes a claim against the guarantor bank. The bank pays its guarantee - and the borrower's debt is now transferred to the guarantor bank.
The bank guarantee is not tied to a specific loan or obligation. If one bank did not give you a loan, then you can use this guarantee in another bank. Even if you have already paid off the loan, and the period specified in the guarantee has not yet passed, it is still valid and you can take out a loan against it again.
The bank can return its guarantee (this condition must be initially written). But he has the right to do this only before the creditor has made a claim against him.
Depending on the payment options for a letter of guarantee, the following varieties can be distinguished:
- Unconditional guarantee - payment of the guarantee occurs on the firstbeneficiary's request.
- Conditional guarantee - payment of the guarantee also at the request of the bank, but subject to the provision of documents confirming the need for this payment.
- Secured Guarantee - issued to the principal in exchange for a pledge of property.
- A syndicated guarantee is when several banks act as a guarantor for a loan.
In addition to securing a loan, a bank guarantee can be issued for:
- Participation in bidding, auctions. It is a guarantor of the serious intentions of the participant and the obligatory payment of the terms of the contract in case of victory in the competition.
- Payment contract. Acts as a guarantee of payment to the supplier of goods or services of the amount specified in the contract.
These are just the most common types of guarantees.
In Russia, this type of security is just beginning to gain its popularity. Therefore, when referring to this type of security, attention should be paid to the correct legal registration of the transaction.
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