Applying for a bank loan can sometimes be more difficult than previously expected. This may be caused, for example, by the requirements that the bank has failed to meet, ie mainly – poor creditworthiness. Sometimes help from a co-borrower may be helpful in such a situation. But what if he wants to withdraw? Can a co-borrower withdraw from the loan?
The urgent expense for which a cash injection is needed, unfortunately, is not always as easy to obtain as is suggested, for example, by advertising financial products. Particularly restrictive, compared to even loan companies, are the regulations for granting classic loans in banks. Each branch requires good creditworthiness from the client, which is made up of several important factors.
The consumer desired by the bank must have regular earnings based on the contract. He must have received it for at least 3 months while concluding the contract for at least the same period. Customers must also earn enough, and spend monthly enough on maintenance, bills and other obligations enough that repayment of loan installments does not prove to be an unpayable burden for him.
For the full picture, that’s not all. The consumer must demonstrate a good credit history based on the verification of entries in the Credit Information Bureau (BIK). He may not have any debt and outstanding loans, and there may be no information about late repayment of other earlier obligations.
Co-borrower, ie valuable credit support
If any of the above-mentioned conditions are not met, the bank is highly likely to receive a negative decision. Being aware of the lack of all the factors required by the bank, however, you can look for a way that will allow the bank to look differently at the consumer’s creditworthiness. It is a co-borrower, ie a lifeline for people with bad creditworthiness. In addition, it can also be support for people who, for various reasons, do not want to apply for a commitment on their own.
What basic information charactersizes the co-borrower in the loan application process?
- This is the person who becomes co-applicant for a loan. In this way, it is subjected to standard verification of creditworthiness. If it is favorable, the bank may agree to grant credit to both persons based on the positive result of verification of only one of them.
- The co-borrower must meet all the conditions that the bank sets for the applicant.
- It may or may not be a person related to or related to the borrower. Therefore, both a family member and a friend, or even a person unknown to us, can be suitable for this role.
What should every co-borrower remember?
- The co-borrower, like the borrower, undertakes to meet all the conditions set out in the loan agreement. He must repay the loan installments together with the additional costs in such a form and in such a specific amount that was determined at the time of signing the loan agreement.
- The co-borrower must also remember that if the loan installments are not repaid, the bank has the right to undertake debt recovery activities. In the long run, they may result in bailiff enforcement, which will be carried out on the borrower who is easier to recover the debt from.
- Being a borrower does not mean that you automatically become a co-owner of the property on which the loan is taken. We are talking about a mortgage or a car loan. The co-borrower need not even have access to it. However, according to the contract – he is obliged to fulfill its conditions regardless of this aspect.
Co-borrower – only trusted person
The above-mentioned conditions do not really impose any restrictions on the co-borrower as to the degree of affinity with the borrower. However, it is worth choosing a person whom he trusts especially when applying for a loan. After all, a loan is a costly commitment that you pay off for months (and even years). Requires being in constant agreement with both people who contract them.
Therefore, it is worth choosing a non-conflict person for this transaction, with whom we are sure of diligence and timeliness. Unfortunately, due to various unexpected or random situations, however, it may turn out that repayment of the loan by the two cooperating borrowers so far will prove impossible.
In addition to such prosaic reasons as falling into conflict by both parties, it may also turn out that, for example, the co-borrower will fall into unexpected financial problems. He will lose his job, his company will collapse, and he or someone close to him will seriously fall ill or have an accident.
These reasons may cause problems not so much with timely repayment of the liability, but may even call into question the question of its further repayment. In the end, the borrower asked for the support of another person because he could not repay the loan himself.
Can a co-borrower withdraw from the loan?
In such a situation, the question arises – can the co-borrower withdraw from the loan? Theoretically, the bank may view this issue negatively, as it involves cumbersome procedures. First of all, in such a situation it is necessary to check again the creditworthiness of the consumer who was previously a co-contributor. If it turns out that the creditworthiness at the time of re-verification does not allow repayment of the liability under the original conditions – the bank may refuse to “remove” a co-borrower from the contract.
It played the role of security for repayment. Its loss means that the bank loses any guarantee for the timely recovery of the given liability in the agreed amount. What about this situation?
If you negotiate with the bank, in which the co-borrower will also actively participate, you can try to apply for an additional co-borrower to join the loan. It must of course meet the same requirements as others paying back a cash loan. Impeccable creditworthiness is required, with an emphasis on adequate monthly income.
But what about the slightly less pessimistic scenario? I am talking about a situation in which a co-borrower wants to withdraw from the loan if the borrower’s financial situation is better? Then a special annex to the loan agreement may be drawn up, which waives the co-borrower from the obligation to implement the provisions of the agreement.
However, it is worth reiterating that the borrower’s good ability is a requirement. He must have, for example, better earnings than when the original contract was concluded. In such a situation, it may happen that the bank will additionally extend the duration of the loan by changing installments to those of a convenient amount for the consumer.