I think that it is very unfair to a person who is becoming guarantor. Banks must change their policies regarding guarantee The bank must evaluate credit of the person availing loan and give that much loan only. Because anyone can avail big loan and flee away leaving the guarantor under big trouble. I would like to tell of a case of personal loans: I think that Bank must give personal loans max limit till the annual package of that person irrespective of healthy financial status of the guarantor. Banks must make a system such that,more than 90% of loan will be recovered from the that loan availing person only and less load on guarantor. Many banks give 5 to 8 times personal loans of annual package if the loan applicant provides financially strong guarantors,hence the person just gives the names of guarantor,takes a big loan and can flee away,leaving the guarantors in soup. If banks give loan according to financial status of main applicant,then this situation will not arise.
This article, though "dressed to nines" as they say due to glamorous way it is written does not really say two important aspects: 1. A guarantor is as liable to a loan as the original borrower as far as law is law is concerned; 2. Becoming a guarantor will affect the credit worthiness ie for eg, you may not have any loan, but have guaranteed a Rs 30 lakh loan. When you want to borrow say Rs 25 lakhs for your own house bank may decline since as far is bank is concerned, you have already a Rs 30 lakh loan
This article though "dressed to nines" as they say becasue of glamourous way it has been pictured does not really mention important aspects like: 1. A guarantor is considered equally liabile for any loan he might have guaranteed under the eyes of law ie if you are a guarantor for Rs 10 lakhs loan you have as good as borrowed the said amount; 2. When you want to borrow some amount for your needs if you are a guarantor that will affect your eligibility for the loan; ie suppose you dont have any loan but are a guarantor for Rs 30 lakh housing loan; you want to borrow Rs 25 lakhs for your house;the bank may decline because as far as bank is concerned you already have a loan of Rs 30 lakh
I am guarantor to someone whom i knew very little but in good faith i gave the guarantee . I had no clue that this was such a serious thing. I have contacted HDFC from where the loan has been granted to take back my guarantee but the bank is refusing.The bank is saying that both the parties have to agree to this. Kindly advise what best i can do?
Re: loan guarantor
by common sense on Jan 06, 2010 11:18 AM
You just refuse to sign any documents further. As per limitation liability law, what ever documents you have signed will expire after 3 years. If you refuse to sign renewal documents, the bank will have to either file a case against you and the original borrower or keep quite if the account is running well.
if you are not sensible, then any body can befool you by making guarantee of you for his luxury in life. the guarantor is equallu liable for the loan taken by the borrower. though the guarantor has right of subrogation but it take so much time and energy. so be carefull before signing any guaratee paper.
I tried to purchase one flat in delhi. The property dealer took all my documents to discuss with bank to avail loan for me months back. Now from his behavior, I doubt that he might misused me as guarantor for his clients. This is very easy as it is not necessary for the guarantor to be present during availing loan. How to be sured that I hv not been made guarantor without my knowledge?
Re: I m worried if I hv been made guarantor without my knowledge
by Jayan thekkedath on Jan 06, 2010 09:53 AM
Documents/Agreements have to be physically signed. Forged signatures is not valid, hence the agreement will be void. So don’t worry When ever you give any photocopy of your docs request to sign the true copy by mentioning for what and which purpose you are providing the docs for.
Re: I m worried if I hv been made guarantor without my knowledge
by yogendra saini on Jan 06, 2010 09:50 AM
for guarantee , banks needs Photo , Id , add proof your A/c st, ITr Etc and even you have to sign some documents. it is not easy to make you guarantor in someone other's loan account . but it will be better to take your papers back from the dealer or compel him to return by way of complaining him to Police authorities.
Re: Re: I m worried if I hv been made guarantor without my knowle
by Dragon Heart on Jan 06, 2010 05:18 PM
thanks. But property dealer ask 5% of the loan amount to get it sanctioned from Bank.
Am salaried employee i have gaven guarantor for one of my colleague , now he is left the oganisation & i dont know where is he?. do i need to pay his loan amount?, or idealy bank has to take action on primary person isnt it.
Re: Loan Guarantor
by D Durjay on Jan 06, 2010 09:50 AM
They will try their best to recover it from primary person , in case of default, so long they are able to trace him.
In case they fail to contact him , they'll file an absconding/missing FIR and will come to you.
My advice: get to know where that person is, have his contact number and address. So long you are able to provide that , you are safe.
Re: Loan Guarantor
by Jayan thekkedath on Jan 06, 2010 09:47 AM
Dear Sreenivasan
Your friend has received the loan on the basis of your Creditworthiness. Think the other way, why the banking doesn’t go far any of his family member guarantorship .Banks credit managers could have thought of securing the loan given by the bank which is borrowed from the general public to be safe. If you are not able analyze a person who is your colleague how can a bank analyze by just going through the docs provide by the borrower
Re: Re: Loan Guarantor
by p kumar on Jan 06, 2010 10:27 AM
the bank will find the easy way to recover the loan. if the borrower is not repaying, and if the bank feels it is cumbersome to follow up with the borrower, they will simply issue a demand note to you, insisting you repay the loan. the bank is not compelled to seek repayment from the borrower. it is in your interest and only upon your persistence that the bank will still put some effort is making the borrower pay. as far as the bank is concerned, it just needs to get its money back, and it is not bothered to seek it only from the borrower. so, please ensure the borrower is always within your vicinity, and make sure he does not abscond, and whenever he leaves the address, collect the new address and give it to the lending bank.
Re: Re: Re: Loan Guarantor
by ashok kalra on Jan 06, 2010 01:26 PM
On the basis of signed documents by applicant, Bank can take over the property and recover the amount by disposing/auctioning the property.
Re: Re: Re: Loan Guarantor
by ashok kalra on Jan 06, 2010 01:26 PM
On the basis of signed documents by applicant, Bank can take over the property and recover the amount by disposing/auctioning the property.
NEVER BECOME GUARATOR......UNLESS U KNOW THAT PERSON 100 PERCENT......IF BORROWER WILL BECOME DEFAULTER ,THEY WILL CATCH HOLD OF GUARRENTER FOR PAYING LOAN....SO BEWARE.....
Re: NEVER BECOME GUARATOR......
by Sathish N on Jan 06, 2010 09:34 AM
Exactly... I can disrupt your financial life, which could affect lot of other things in life. Only become a guarantor of someone very close to you and of money which you are, as worst case, ready to pay the bank.
