Financial institutions may require guarantees to enhance the credit standing of prospective borrowers, thus enabling them to obtain financing.
Many people think that a guarantor gives a reference of the good character of the borrower. They do not realize that they are legally bound to pay back the loan if the borrower cannot or will not pay.
The following knowledge base of articles provides information on the details and implications of guarantees given by individuals and aims to increase public understanding on guarantees. It guides you on the legal requirements, rights and liabilities of a guarantor as well as highlights the important issues that a person should be aware of before agreeing to become a guarantor.
Guarantors are
legally bound
to pay back the loan if the borrower cannot pay
Contents
Reprinted with permission from BankingInfo (A Consumer Education Programme)
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