An instant personal loan is a bliss that helps you out of any emergency. It will enable you to act and make sure you meet all your needs without any hurdle. Affordable and easily available loan, it will help you in easy access to fund. However, you may provide a guarantor to your loan provider, in support of the amount you borrow. Often a loan guarantor will make your eligibility criteria strong and make you lookout for an impressive rate of interest. You can make anyone your guarantor, be it your friend or your family. Often it is seen, you helping your brother to take up a loan by being a guarantor. Is it safe? How can it affect you? Before you take the guarantee of someone, make sure you know the consequences.
What is a loan guarantor?
If you are looking out for a personal loan and have a bad credit score, you may make a guarantor. This will make it a secured form of a loan. A loan guarantor is often related by blood or kind. Taking the guarantee of your loan amount, he is also liable for the amount you take. It is a legal deed and proper legal things are documented. Often you will see a brother being a guarantor and helps you get a loan. The loan provider when finds a loan guarantor often approves your loan without any questions.
Is the loan guarantor liable?
The loan guarantor is liable for anything that happens related to the loan. A guarantor means he offers you the guarantee of repaying the loan. Anything that happens within the loan tenure, a loan guarantor will surely be responsible.
How is a loan guarantor liable?
If there is a default, the loan provider will take action against the loan guarantor. He will be contacted regarding the default and he will have to pay the debt. If you are taking a guarantee make sure you know that you may have the pay the loan if the borrower is not able to. There can be legal action taken against you as you are giving the guarantee that the debt will be paid back.
Also, your property can be taken into account to pay back the loan amount. This also puts a huge impact on your credit score. Your credit history will be damaged. If the borrower is not paying, the loan guarantor is being charged and he has to pay the loan. So you get directly affected if you are being a legal loan guarantor.
Wrapping up
Use a personal loan calculator to calculate the cost and manage finance. It will help you in borrowing and keep your credit record safe.