Are terms and conditions for loan guarantee negotiable?
The answer to your question is Yes and no. There are no individual centric terms and conditions but if you find any clause of the bank unacceptable, talk with the bank and the borrowers before signing the guarantor agreement with the bank. Ideally stand as a guarantor to only those people who you know are financially sound and will be able to repay their loans
Most lenders do not allow to change the terms and conditions for loan guarantee. This is especially true for loans such as Personal Loan.
Becoming a guarantor has similar effects to becoming a borrower. This is because the bank doesn’t want to take too many risks. They want to ensure that the loan given is repaid. If you are a guarantor, you will be responsible for the repayment of the loan in case the original borrower defaults. Also, if the borrower doesn’t repay on time, your Credit Score will also get affected. It can also affect your eligibility for loans. So, if you are planning to become a guarantor for a loan, think it through very carefully. If you think it is too risky, don’t do it.
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