Bank guarantee how to get it and what does it consist of?
Poles take loans – that’s a fact. It is estimated that every second Pole has a credit or loan, and the most active group consists of those professionally active. Despite various objections and uncertainties arising from cooperation with banks, we often decide to sign a long-term contract. So, do we feel safe as a borrower? Do we need a bank guarantee and really help in our home or company budget? And actually … what is she?
What is the bank guarantee?
This is a relatively new law, it was created in 1997. Under the name of a guarantee, we mean a situation in which the bank (the so-called guarantor) undertakes that after fulfilling the conditions of the borrower (i.e. in this case – us), he will perform a cash benefit on his behalf. This is done directly by means of a transfer from a given bank or by means of an intermediary branch.
Why do we need such a guarantee and does it have real benefits?
Practice shows that if the debtor shows real problems with timely repayment of obligations (e.g. installments), the institution will take over the process of settling this amount in part or in whole. This means that in the event of serious financial problems, we can count on help that will minimize the risk of debt formation and accumulation. So this is, as the name suggests, a way of securing and guaranteeing that the amount incurred will be settled.
Important! To receive a bank guarantee, you must sign a contract. Only the bank can take over the role of guarantor. Any branch, company or individual that guarantees this service is most likely trying to extort the amount from us. Anyone can be a beneficiary, i.e. a person buying a bank guarantee. We as an individual, but also an entrepreneur or a company operating on a foreign market.
Bank guarantee cost
Of course, this type of action also has consequences for us. The warranty service is not free and not available to everyone. The borrower will tell you to pay a commission to the bank – i.e. a certain amount that will be a collateral and back-up facility used in financial problems. It is this commission that will settle the debt. The amount of commission depends on the company with which we decide to cooperate. Most often, the costs range from 0.5% to even 1.5% of the total amount incurred. So if we are talking about 100,000 dollars, we must pay from 500 to 1500 dollars.
Benefits of a bank guarantee
In addition to the above basic advantage of signing this form of contract, there are several other added values:
- funds are received quickly, without having to start a lawsuit
- banks are financially stable, which guarantees that they will receive cash regardless of other factors
- no matter what the factors, creditworthiness is not affected
When to use bank guarantees?
The use of a bank guarantee is widely used. Of course, first of all, it is used to adjust the amount for purchased goods or services. In addition, it applies to transactions that will be carried out in