Guarantees and Responsibilities
Guarantees are a commitment to fulfill the financial obligation of another person or business (the Borrower) if they fail to do so.
Only agree to guarantee for a person or business you know well and trust.
Before You Become a Guarantor:
- Evaluate Your Ability to Fulfill the Borrower’s Obligation
Carefully consider if you can manage the financial responsibility on behalf of the borrower. Guarantee only an amount you could pay if necessary (the maximum liability of the guarantor). - Review All Contract Details
Read the draft of the guarantee and loan agreements thoroughly. Make sure you understand all terms and obligations presented by the Creditor. - Seek Clarifications from the Creditor
Reach out to the Creditor with any questions you may have. Legal assistance is recommended if needed. - Verify Your Contact Information
Ensure your address, phone number, and email are accurately stated in the guarantee agreement. - Stay Proactively Informed
Keep up with the loan status. Contact the borrower regularly, and if necessary, consult with the Creditor. - Update Contact Details Promptly
Notify the Creditor of any changes to your address, phone number, or email to ensure you receive all necessary information. - Read All Communications from the Creditor
Always open messages from the Creditor and collect any registered mail promptly. - Fulfill Obligations if the Borrower Defaults
Should the Borrower fail to meet their obligations, the Creditor will contact you to fulfill them. Remember, you are committed to fulfilling these obligations on behalf of the Borrower. - Avoid Additional Expenses and Legal Disputes
Timely payment of the debt can prevent extra costs and legal complications. - Seek Reimbursement from the Borrower
After fulfilling the obligations, you have the right to request reimbursement from the Borrower for any amounts paid on their behalf.