Do I need a guarantor for my hire purchase or car loan?
The need to have a guarantor for hire purchase (HP) financing would depend on the banking institution's credit assessment of your ability to repay the instalments.
If you default on your repayment, the guarantor is liable for the unpaid portion of the hire purchase (HP) financing and the interest due.
A person who agrees to be a guarantor will need to sign a letter of guarantee. He will also be given a copy of the hire purchase (HP) agreement within 14 days after the agreement is signed.
Reprinted with permission from BankingInfo (A Consumer Education Programme by Bank Negara Malaysia)
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