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Financial institutions may require guarantees from prospective borrowers to enhance the borrower’s credit standing and enable them to obtain financing. |
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If someone names you as a guarantor, you are legally bound to pay back the loan or balance there of if the borrower cannot or will not pay. |
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| Related Information |
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| What Else Can I Do? |
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Joint Guarantee |
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Under this guarantee, the obligations are passed to the surviving guarantors upon
death of one of the guarantors. |
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Joint and Several Guarantee |
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Under this guarantee, the estate of a deceased guarantor will remain liable under the guarantee together with the other guarantors. |
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| To be a guarantor he or she must be: |
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18 years old and above |
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Not a bankrupt |
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Of sound mind and having the mental capacity to understand the responsibilities and obligations of a guarantor |
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Not forced, influenced or tricked into being a guarantor |
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Obtain a copy of the guarantee letter or contract and any other documents in relation to the loan transaction |
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Seek legal advice before signing the contract |
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Information on the outstanding balance of the borrower’s account subject to the borrower’s consent |
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Call upon the borrower to pay off the loan to release you from all your liabilities under the guarantee. |
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Be indemnified by the borrower for any payment made to the financial institution |
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Read and understand the nature of the guarantee. Most people willingly sign on as a guarantor without understanding the impacts on them. |
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Check and ensure the guarantee is subject to the laws of Malaysia. |
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Be wary about giving a copy of your identification to anyone other than the financial institution or your lawyers. |
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Do not sign a blank or partially filled document, or if you do not have a financial, business or moral interest in the transaction. |
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Do not become a guarantor to someone whom you have doubts about their ability or integrity. |
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Ensure that you are aware of your liabilities in the event that variations are made to the terms and conditions of the loan. |
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