WHO IS A GUARANTOR AS A FORM OF SECURITY
WHO
IS A GUARANTOR?
A
guarantor is a person who promises to pay the debt of the borrower in case of
the default of the borrower on his or her financial obligation. In essence, a
guarantor secures someone's loan by committing to pay the loan if the borrower
fails to pay it.
Guarantors
are asked to sign a guarantee agreement on loan form – this is a legally binding document
and once you sign it you become responsible for the loan repayments if the
person you are acting as guarantor for cannot pay.
MAIN
FACTORS TO CONSIDER BEFORE AGREEING TO BECOME A GUARANTOR?
- Are you able and willing to pay the loan
amount?
- How likely is it that the borrower will
be able to repay the loan?
- Are you ready for the consequences if
you are unable to pay?
- Do you clearly understand the loan
agreement with the Sacco?
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