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Can you be a guarantor? Asses yourself !!!

Written By Vignesh Shekar on Sunday, July 10, 2011 | 10:34 PM

           If u have the ability to repay the loan amount, then accept yourself as guarantor. Why is it so?? Read on...
                    A Guarantor is a respectable person for both the parties of the contract. Generally a guarantor is required for availing any loans from any person. Assuming a bank gives a housing loan to a person, who sanctions a loan of Rs.15,00,000/- bank has to take due care to get that amount back from the Customers. One of the tools which the financial institution executes is Guarantor.
What does a Guarantor do actually?
                      Physically a guarantor is made to sign a document which runs 20 to 25 pages and he is supposed to sign the documents before the officials of the financial institutions. He generally signs in 10 to 15 columns, generally people does not read what it actually says. What those documents says is that if the borrower fails to repay the full amount or part amount or any of the amounts borrowed including interest,

the guarantor undertakes to pay those dues fully by him which has been accepted on behalf of the officials of the financial institutions. Therefore from the day of signing he may be made liable for the whole amount borrowed of part of the amount what so ever be if the original borrower fails
By this action, the financial institution gets a sturdy assurance towards their money lent. The Banks or other financial institutions has the right to regain the property (if loan is taken for house) or has the right to get back their loan amount for sure irrespective of the receiver of the loan. They may get either from the borrower or from the guarantor.
Actions towards guarantor:
                  The guarantor is bind by the actions of the borrower when the borrower fails to repay. Therefore the guarantor is held liable. If u really know all these facts and if you are supported with Money at your back end, u can proceed towards guaranteeing a person. If not you will be falling in trench.
Hereafter be alert when you sign any document. Signature acts as a sole proof of accepting. Therefore be careful while u sign anywhere at any time. This is not only for a guarantor, but for all who is not aware of any of these things.
Now, what is the assessment result??
                   Are u aware of all these already before signing?? If so great@!! God Bless!! If not, please revert back those where you gave guarantor.
Reverting back is another task which people might not know. According to the provision laid, a guarantor can revoke at any time if he wishes not to continue as a guarantor. But generally the financial institutions will release the guarantor only when he gets a substitute or only when he satisfies that his money lent, will be back without fooling them. Be careful in these issues.


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Vignesh, the founder of VikiInfos, is a Commerce Graduate and Pursuing his Chartered Accountant Profession, now in the Intermediate level. Blogging is his hobby and likes to share things. He plans to Update this blog with latest happenings and things that he gets to know at times and worthy information.a friendly user blog can be followed by any person. Join us free and subscribe.
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