Aval
- Loan Guarantee: This is a way of ensuring that a loan will be repaid. The
loan guarantor has the responsibility of paying the bank if the person
who has taken out the loan is unable to meet payments to the bank.
Aval
bancario is a bank Guarantee: This is when a bank acts as a guarantor should
its client be unable to repay a loan.
Avalista
is the Spanish word for Loan Guarantor - This is the person who gives a
guarantee to the bank that a loan will be repaid in the event that the person
who has taken out the loan cannot meet repayments. There are a number of risks
to be considered before agreeing to act as a guarantor.
It
is quite common for Spanish banks
to ask for guarantors when agreeing to mortgages especially when the mortgage
is higher than 80% of the value of the property. It may be particularly useful
for first-time buyers to have a guarantor when applying for a mortgage. Other
occasions when a bank might require a guarantor before agreeing a mortgage is
when the person applying for the loan has a low income in relation to the amount
they want to borrow.
In renting/letting
contracts in Spain the tenant can also be asked to provide a guarantor
by the landlord/letting agent before any contracts can be signed.
Related
links:
Property in Spain