{"id":1887,"date":"2021-08-30T15:30:00","date_gmt":"2021-08-30T07:30:00","guid":{"rendered":"http:\/\/loanpanda.com.my\/staging-test\/?p=1887"},"modified":"2022-09-20T17:56:09","modified_gmt":"2022-09-20T09:56:09","slug":"things-to-know-to-be-a-guarantor","status":"publish","type":"post","link":"https:\/\/loanpanda.com.my\/test\/things-to-know-to-be-a-guarantor\/","title":{"rendered":"Things to Know To Be a Guarantor","gt_translate_keys":[{"key":"rendered","format":"text"}]},"content":{"rendered":"\n

One of the common blacklist reasons is being a guarantor. Even if it is not your fault, making a guarantee for a borrower in a loan agreement will cause you to be blacklisted by Bank Negara.<\/p>\n\n\n\n

Thus, this article will tell you what it takes to be a guarantor, especially if you need to be one.<\/p>\n\n\n\n

What is a Guarantor?<\/strong><\/strong><\/h2>\n\n\n\n

A guarantor is a person who assures a bank or lending organization that the person borrowing money will pay it back. This isn’t simply a verbal guarantee. Therefore, you are accountable for making sure the bank is paid by any means.<\/p>\n\n\n\n

If the bank is unable to collect the money from the borrower, the guarantor is responsible for repaying the loan. The specifics of the guarantee document that a guarantor signs may vary from bank to bank, but the guarantor’s responsibilities stays the same.<\/p>\n\n\n\n

What is a Guarantor\u2019s responsibility<\/strong>?<\/strong><\/strong><\/h2>\n\n\n\n

A guarantor has to pay for the loan if the borrower do not pay. However, a guarantor is normally only accountable for the amount if the bank sends you a letter of demand.<\/p>\n\n\n\n

Also, the bank has the right to demand repayment from you at the same time that the borrower is required to pay. Unless in specific circumstances of personal loans, there is currently no law requiring them to go for the borrower first. Even in such cases, the bank merely needs to establish that they could not reach the borrower.<\/p>\n\n\n\n

Unfortunately, if the borrower defaults, this record will appear on your credit report, and the only way to remove it is to pay the debt.<\/p>\n\n\n\n

Can you quit being a Guarantor<\/strong>?<\/strong><\/strong><\/h2>\n\n\n\n

Depending on the conditions of your guarantee agreement, you may or may not be able to quit being a guarantor. The majority of banks will not allow it unless the debt is fully paid off. The only other possibility is that the bank violated the agreement, which is not likely to happen.<\/p>\n\n\n\n

However, if you are afraid that you will not be able to make the repayment, try to speak with the bank. Some banks may agree to certain terms.<\/p>\n\n\n\n

Another option is to have the borrower sign a letter of indemnity for you. Ensuring that if a borrower defaults, you will be able to pursue legal action against them. In fact, obtaining a letter of indemnity at a later date should not be a problem. However, it is always best to obtain one before signing the guarantee agreement.<\/p>\n\n\n\n

Tips for being a <\/strong>Guarantor<\/strong><\/strong><\/h2>\n\n\n\n

You must be willing to incur risks as a guarantor. Here are some tips if you are planning to be a guarantor.<\/p>\n\n\n\n