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If your friend or relative does not pay the EMI after becoming a loan guarantor, then the bank can take your salary, property and this can also spoil your CIBIL score. Let us tell you that most of the banks do not remove the names easily because this increases the pressure on them and they run the risk of not getting the money.
Loan Guarantor: While taking a loan, the bank often asks for a guarantor and if friends and relatives ask you to become a loan guarantor, then you agree very easily because they are in your relationship, so you cannot refuse them. But do you know that becoming a guarantor means taking the entire responsibility of that loan yourself. If the loan borrower is unable to pay the EMI, the bank will directly come to you to recover the money.
According to Section 128 of the Indian Contract Act 1872, the legal responsibility of the guarantor is equal to that of the borrower. Meaning, if the bank wants, it can deduct money from your salary property. On top of this, your CIBIL score will also deteriorate and it will become difficult to get a loan yourself. Therefore, think a hundred times before becoming someone’s guarantor. But suppose you are someone’s loan guarantor, then you must know how you can come out of this problem.
What to do if you do not want to become a loan guarantor?
If you are someone’s loan guarantor and want to remove your name from the loan guarantor, then for this you need to have some information. The easiest way is for the loan taker to bring another guarantor and inform the bank and register his name as the loan guarantor. With this your name will be removed as bank guarantor. Apart from this, you can also adopt the legal route. But this will be a very long process.
Most banks do not remove names easily because their risk increases. Therefore, it is better that you avoid becoming a guarantor in the beginning itself. Before becoming a guarantor, check some things that your friend or relative is taking a loan and how big is the loan. If you have your own loan, then refuse your friend/relative at the time of becoming a loan guarantor.
Keep these things in mind before becoming a loan guarantor
It is also very important to understand that if the loan is expensive then your risk will increase more. Thirdly, the most important thing is that you should have correct information about the income, job, property of that friend or relative for whom you are becoming a guarantor. With this you will also be able to understand whether your friend will be able to pay the EMI or not.
Many people become guarantors in friendship and later repay lakhs. If you have a good CIBIL score then the bank will easily target you, hence even if friends and relatives ask you to do so, refuse because the bank will easily give them the money but if there is a default, the bank will come to you.
