How does guarantor situation work?

T

THE LATCH

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Hi,

Can anyone tell me exactly how a guarantor situation works?

What happens if payments are missed??

How binding is it, does the guarantor have to pay back everything if the borrower defaults?

Thanks.
 
The Guarantor stands in the shoes of the borrower and has all the responsibilities and liabilities that the borrower has. There can sometimes be a mistaken view by borrowers that the need for a guarantor is just something the lending insititutions look for but don't take all that seriously and that it is highly unlikely that a guarantor will ever be called on to cough up. Not true. If a person is asked to go guarantor, they need to be sure that they can make all the payments if the borrower defaults.

mf
 
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