Being a guarantor affects CIBIL Score?

POSTED BY Manohar ON May 28, 2012 11:47 am COMMENTS (4)

I am planning to take a HOME LOAN for myself in a month. One of my cousin just asked me to be a guarantor on a CAR loan he is taking. If I am ready to be a guarantor on the car loan, will my CIBIL score be affected because of it?

Will I face any kind of problem or will it affect me in any way to get my home loan just because I am a guarantor on a car loan.

Will it affect my eligibility of the home loan?

4 replies on this article “Being a guarantor affects CIBIL Score?”

  1. BanyanFA says:
    May 28, 2012 at 4:14 pm

    Manohar,
    Just one more addition to Ashal’s comments. It all depends upon how you are reflected in the loan books of the respective bank. It may be very likely that CIBIL may not come to know that you are acting as a Guarantor unless the Guarantee is invoked (caused by a default of primary borrower). Hence, it may not affect your Home Loan application till the Guarantee is invoked.

    If the Guarantee gets invoked, even then it shouldn’t affect your CIBIL score, unless you default upon your obligation towards the lender in your capacity as a Guarantor.

    Regards
    BanyanFA

    Reply
    1. Manohar says:
      May 29, 2012 at 8:17 am

      Thanks for that clarification BanyanFA. But as Ashal mentioned “while applying for your home loan, your bank may demand the details of any other loan where you are not borrower but merely a guarantor & this may hamper your loan eligibility a bit.” – I am a bit worried about this, because I am already not getting the loan amount I want. I can further hamper my loan eligibility by being a guarantor.

      Reply
  2. Ashal Jauhari says:
    May 28, 2012 at 12:44 pm

    Dear Manohar, being a guarantor ‘ll not affect your CIBIL score as long as that Car loan repmt. is regular. In case your cousin defaults, being guarantor the car loan becomes your responsibility & you w’d have to pay from your own resources. Now in this case, if you are paying that car loan regularly, the CIBIL score for you ‘ll not be affected but your cousin’s ‘ll be for sure.

    Please do note, while applying for your home loan, your bank may demand the details of any other loan where you are not borrower but merely a guarantor & this may hamper your loan eligibility a bit.

    Thanks

    Ashal

    Reply
    1. Manohar says:
      May 28, 2012 at 2:28 pm

      Thanks Ashal. This clears my doubt.

      Reply

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