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What does counter guarantee mean?

Time: 2014-03-25         Source: Rong 360 original         Author: Chen Li

ApplyingSecured loanWhen the borrower is sometimes asked to provide counter-guarantee measures, it can be successfully obtained.loan. However, "anti-guarantee" is a very professional vocabulary. For the novice loaner, it is really a bit of a monk who can't figure it out. But don't worry,Rong 360 loanExperts will answer this for you.

To know what a counter-guarantee is, you need to start with a guarantee. As a guarantor, when the borrower is unable to repay the loan, it will perform the guarantee obligation and repay the remaining principal and interest. For the sake of insurance, the guarantee party guarantees the realization of its recovery right, and the borrower will provide the collateral for counter-guarantee.

Counter-guarantee is often used between the guarantee company and the borrower. In general, in order to make a profit and reduce the risk of the loan, the bank usually allows the user with insufficient qualifications to find the guarantee company and guarantee the loan under the guarantee of the guarantee company. The purpose of the bank is to pass the risk on the guarantee company. When the borrower refuses to repay the loan, the guarantee company must replace the borrower and pay the bank.

How to compensate for the loss of the guarantee company? As a guarantee company, it will certainly not be willing to bear these losses, so the borrower will be required to provide certain collateral as a guarantee to guarantee the interests of the guarantee company. If the borrower refuses to repay the loan, the guarantee company has the right to file a lawsuit with the court to seal up and sell the collateral to make up for the economic loss.

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