4 replies on this article “Pros and Cons of being a Guarantor?”

1. Sunil Kumar says:

   August 2, 2011 at 9:15 am

   So, will bank still look for a guarantor, when one has gone for a insurance? Assuming insurance is expected to cover the entire loan amount incase of unforseen death. And I think, none would like to default and only the circumstances would lead to it. For eg. a person losing a job, in such instances, I think bank is gracious enough to understand such situation and accordingly either reduce the EMI or pause the payment till the person gets job.

   Any thoughts?

   Thanks
   Sunil Kumar

   Reply
2. Manish Chauhan says:

   August 1, 2011 at 7:09 pm

   Hari

   In case of home loan , what if the loan outstanding is 20 lacs and cost of house is 15 lacs ? Then the bank will catch guarantor for the remaining amount .

   Dont think that this is impossible , when there was housing crisis in House , the house price was below the loan amount . It can happen in India too

   Manish

   Reply
3. Hari Sudhan says:

   August 1, 2011 at 7:02 pm

   Manish

   You say …

   “When you become a guarantor , legally you are telling companies , that if the person is not able to pay , you can catch me ” …

   Q1) But when the companies provide loan, say for instance an housing loan, and if the person is not able to pay, will the bank try to seize the property or catch the guarantor ?

   Well I am trying to understand that if the bank can seize the property and ‘somehow’ ( like sell the property ) take the pending money from that property why should they even catch the guarantor ? as we know bank is holding the original sale deed document ( in case of home loan ) during the loan period.

   Q2) What would be the steps in sequence ( order of occurrence ) that will be taken by companies in case of loan defaulters ?

   – Hari Sudhan

   Reply
4. Manish Chauhan says:

   August 1, 2011 at 2:23 pm

   Sunil

   Nice question, this has very obvious answer . When you become a guarantor , legally you are telling companies , that if the person is not able to pay , you can catch me .

   So when the person does not pay, legally companies can catch you , attach your prioperties, bank accounts and make sure pay his liablities ..

   In case of credit cards and other loan this can impact you a lot , but your CIBIL report can also mention this and you can also be marked as Defaulter, so dont take this for granted , become a guarantor , only if you are totally ready to take the responsibility .. Like i can become a guarantor for my brothers education loan , but may not want to become a guarantor of my friends car loan . Say No , its ok : https://www.jagoinvestor.com/2011/07/cibil-report.html

   Manish

   Reply

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