Credit Guarantee: Secure Your Loan with a Solid Personal Surety
Acting as a guarantor – or requesting one for your credit – is one of the most powerful tools to secure a loan. Understanding how the guarantee works, what it covers, and which legal safeguards protect the guarantor is essential before you sign any commitment.
Discover the different types of guarantees, your rights and obligations as a guarantor, and how a well-structured guarantee can facilitate access to credit while protecting everyone involved.
A Clear Overview of the Credit Guarantee
The guarantee is the personal security par excellence: a third party (the guarantor) commits to the creditor to intervene if the main borrower encounters repayment difficulties.
Used correctly, this mechanism strengthens your credit file while remaining framed by strict rules designed to protect the guarantor.
What Does It Mean to Act as a Guarantor?
To act as a guarantor for someone means formally committing to pay, in their place, if they do not fulfil their debt obligations. The guarantor may be a natural person (private individual) or a legal person (for example, a financial institution) who undertakes contractually towards the creditor to settle the amounts due if the main debtor defaults at maturity.
In principle, anyone recognised as legally capable and, of course, solvent can act as a guarantor. However, this is never a trivial commitment: the guarantor exposes their own assets and income to the risk of having to repay a debt they did not personally contract, if the borrower fails to respect their obligations.
Before signing, the guarantor must therefore understand the scope of the guarantee, the maximum amount covered, the duration of their commitment, and the situations in which the creditor can legitimately turn to them. A transparent discussion with the lender and, if necessary, with a legal or financial advisor is strongly recommended.
Important Reminder for Future Guarantors
By becoming a guarantor, you are using your own assets and income as security for someone else’s credit. If they do not repay, you can be asked to pay all or part of the outstanding debt, within the agreed limits of the guarantee.
The Main Types of Credit Guarantee
In credit practice, a key distinction is made between a simple guarantee and a joint guarantee. This classification determines in which order and under what conditions the creditor may pursue the debtor and the guarantor(s).
- Simple Guarantee: the creditor must first take action against the main debtor. Only if this action proves insufficient can they turn to the guarantor. In the presence of multiple guarantors, the outstanding balance is, in principle, divided proportionally between them.
- Joint Guarantee (Joint and Several Liability): the creditor may claim immediate payment of the entire debt directly from one or more guarantors, without first exhausting remedies against the main debtor.
From the creditor’s point of view, adding a joint and indivisible guarantor considerably strengthens the security of the loan, since it offers the possibility to recover the total outstanding amount quickly, either from the debtor or from the guarantor(s). For the guarantor, this stronger form of commitment requires particular vigilance and a thorough understanding of the potential consequences.
Simple vs Joint Guarantee at a Glance
Simple: creditor acts first against the borrower, then against guarantors, proportionally.
Joint: creditor can immediately pursue the guarantor(s) for the full amount due.
The Guarantee in Consumer Credit
When a guarantee backs a consumer credit, the lender must comply with specific information and protection rules for the guarantor. These rules aim to ensure that the guarantor clearly understands the risk assumed and can effectively monitor the performance of the credit over time.
The lender has a legal duty to inform the guarantor clearly and in writing. In particular, the guarantor must be informed:
- Of the guaranteed amount: the guarantee covers only the amount expressly mentioned in the deed, increased, where applicable, by late payment interest. A copy of the credit agreement must be provided in advance and free of charge to the guarantor.
- Of significant payment incidents: the lender must notify the guarantor when the borrower is late in paying two instalments or when at least one-fifth of the total repayable amount is overdue.
- Of any payment facilities granted to the borrower: deferments, rescheduling or other arrangements that may influence the evolution of the outstanding balance must be communicated to the guarantor.
This regular flow of information allows the guarantor to react in time, if necessary, and to monitor the risk they have assumed.
The creditor cannot automatically turn to the guarantor at the first delay in payment by the borrower. As a rule, the borrower must be in default on at least two instalments before more severe measures are taken.
In such a situation, the credit agreement may be terminated, and the borrower will be registered with the National Bank of Belgium for non-compliance with their credit obligations. The creditor may then, depending on the type of guarantee provided, claim payment from the guarantor within the limits laid down in the guarantee deed.
This escalation mechanism is designed to give the borrower an opportunity to regularise their situation, while ensuring that the guarantor is only called upon in objectively serious cases of default.
In the case of a credit agreement concluded for an indefinite period (for example, certain forms of revolving credit), the law sets clear limits on the duration of the guarantee in order to protect the guarantor from an excessive or unlimited commitment.
- The guarantee may not cover a period longer than 5 years.
- At the end of this period, the guarantee may only be renewed with the guarantor’s express consent. Renewal can never be automatic or implicit.
These time limits are essential: they ensure that the guarantor can regularly reassess their financial situation and their willingness to remain committed alongside the borrower.
A gratuitous guarantee describes the situation where a person commits alongside the main debtor without receiving any direct financial compensation. This is typically the case when a family member or close friend agrees to become a guarantor purely out of solidarity.
Since 1 December 2007, such a gratuitous guarantee is only valid if a set of specific legal conditions is strictly respected:
- The guarantee must be recorded in a separate contract from the original credit agreement.
- The duration of the guarantee must be clearly indicated in the deed.
- The guaranteed amount must be explicitly mentioned.
- The contract must include precise handwritten statements by the guarantor, such as: “By acting as guarantor for … within the limit of the amount of … (in figures) covering the payment of principal and interest for a duration of … I undertake to reimburse the creditor of … the amounts due from my assets and income if and to the extent that … does not fulfil this obligation themself.”
- The guarantor’s commitment must remain proportionate to their repayment capacity, assessed in light of their income and assets.
- The heirs of the guarantor are only bound up to their respective share in the estate; they do not automatically inherit unlimited liability.
- The creditor must inform the guarantor of the performance of the main obligation, at least once a year in the event of regular repayment.
These safeguards reflect the legislator’s desire to protect individuals who agree, often out of generosity, to support the credit of a relative without any personal financial gain.
Key Advantages of a Well‑Structured Credit Guarantee
Stronger Credit Application
Adding a solvent guarantor can significantly strengthen a credit application, especially when the borrower’s income is irregular, recent, or when the project requires a higher level of security for the lender.
Clear Legal Framework
Strict rules govern the amount, duration, and conditions of activation of the guarantee. This legal framework aims to balance the interests of the lender, the borrower, and the guarantor, and to prevent excessive commitments.
Transparency and Information
Obligations to provide information to the guarantor, particularly in the event of arrears or rescheduling, ensure ongoing transparency. The guarantor is not left in the dark and can make informed decisions throughout the life of the credit.
Need Advice on a Credit With Guarantee?
Whether you are a future borrower or a potential guarantor, it is essential to understand the implications of a credit guarantee before committing. Get a personalised, no‑obligation simulation and an assessment of the most suitable solution for your situation in 2026.