Loan guarantor: If you are thinking of becoming a guarantor for any loan or are going to become, then before that know these things so that you do not get into any trouble.
The common man sometimes needs a loan to meet his needs. In such a situation, everyone's attention first goes to the personal loan. It is very easy nowadays to get a personal loan, for which you have to meet the criteria of the bank or that financing lending partner, in which your income, credit score and location (where you live or address proof) matters. If you do not meet these parameters of the bank, then the bank gives you an option that you ask for one or two guarantors. Small loans do not require a guarantor, but many times you need a guarantor for more personal loans, car loans or home loans.
However, you should know that if you also want to be or have become someone's guarantor, then you may have to go through many big problems. The meaning of guarantor in simple and clear words is that you give a guarantee to a borrower to get a loan that he will repay the loan on time, but many times it is not so, then it is the responsibility of the guarantor to repay the loan. Therefore, understand every aspect of it very well that you will not have to get into trouble somewhere.Generally, there are two types of guarantors in the case of loans. The first guarantor is the non-financial guarantor and the second is the financial guarantor. In the first case, if you are the guarantor, then your responsibility is only that you may have to give the information of that person. At the same time, in the second case, if the borrower does not repay the money, then the amount can be recovered from you. For this, the bank can adopt a variety of tactics, so that there is pressure on you to deposit money.What things to keep in mind
If you are becoming or thinking of becoming a guarantor of someone, then you should know very well whether he has the ability to repay the loan or not? It is also important for you to know whether he has already taken a loan. If taken, is he paying it on time? Or it should not happen that the new loan increases the burden of EMI (Easy Monthly Installment) on him and his EMI gets bounced.
Apart from this, in the case of becoming a guarantor, one thing is also seen that many times you get someone a loan or credit card as an addon, but he does not pay on time or becomes a defaulter. Your credit score may deteriorate, making you less likely to get a loan in the future. In such a situation, before becoming a guarantor, keep these things in mind.