Anyone can be a guarantor as long as the person can meet the legal requirements to be a guarantor. However, since a guarantor would be liable to pay the debts of the borrower in the event the borrower defaults, you should consider becoming a guarantor only if you are sure that you can pay the debts of the borrower in the unfortunate event that he or she fails to do so.
The legal requirements of a guarantor include the following:
- Must be 18 years old or above
- Must not be a bankrupt
- Must be of sound mind and have the mental capacity to understand the guarantee document and the responsibilities and obligations of a guarantor
- Must have freely consented to being
- a guarantor (i.e. should not have been forced or must not have entered into the contract under undue influence, fraud, misrepresentation or by mistake)
Nevertheless, the final decision whether or not to accept you as a guarantor lies with the financial institution.
Reprinted with permission from BankingInfo (A Consumer Education Programme)
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