Advertisement

What are the different types of bank guarantees? What should a guarantor know? Advertisement  
A loan can be guaranteed by one or more guarantors. However, this does not mean that the liabilities of the guarantors are shared equally amongst themselves.

The financial institution has the right to recover the debt wholly or partially from any of the guarantors.

  • Joint Guarantee
    Under a joint guarantee, upon the death of one of the guarantors,
    the obligations under the guarantee passes to the surviving guarantors.

  • Joint and Several Guarantee
    Under a joint and several guarantee, upon the death of one of the guarantors, the estate of the deceased guarantor will remain liable under the guarantee together with the other guarantors.

Back to Guarantors' Contents


Reprinted with permission from BankingInfo (A Consumer Education Programme)


Back to the top


Sponsored Links

Share this Page
submit to reddit


Notes
Tags   :     |    |    
Knowledge Base ID   :   1203
Last Review   :   May 22, 2014
Source   :   BankingInfo

Related Credit and Loans Issues
» What are the do's and don'ts of being a guarantor?
» What if I am not agreeable to the changes made in the terms and conditions to the loan granted to the borrower after the contract of guarantee has been signed?
» I've given a loan guarantee and the principal has reduced as a result of regular payments. The borrower approached the bank for an increase in facilities which is within the amount of the guarantee signed by me. Am I liable for the increased amount?
» What are the limitation of actions against guarantors? When will your liabilities as a guarantor be discharged?
» What is a guarantee? Why do banks need a guarantee?
» Guarantees are normally given in favour of the financial institution and it is normally a standard document written with legal terminology. I do not understand them. What do I do?
» Can I be a guarantor for a loan taken by my spouse or child?
» How do I withdraw as a loan guarantor?
» Will my liability as a guarantor be discharged upon the death of the borrower?
» Who can be a guarantor?

Back to the top