Think twice before becoming a bank loan guarantor. Removing your name isn't easy. Learn the process.

If someone approaches you in the future about becoming a bank loan guarantor, you should have all the information necessary to avoid any problems or regrets.

Loan Guarantor Responsibilities: There are times in life when a family member, friend, or distant relative needs a loan from a bank. The bank may ask for a guarantor in exchange for providing the loan. At the urging of friends and relatives, we often agree to become a guarantor. Many people are unaware of the responsibilities of becoming a guarantor and later regret their decision.

If someone approaches you in the future about becoming a bank loan guarantor, you should have all the information you need to know to avoid any problems. It's also important to know whether you can remove your name once you've become a bank guarantor.

What are the responsibilities of a loan guarantor?

If someone becomes a guarantor for a loan, it means that they assume full responsibility for the loan. This means that if the loan borrower is unable to repay the loan, the bank can recover the money directly from the guarantor.

Under Section 128 of the Indian Contract Act, 1872, the guarantor's responsibility is equal to that of the loan borrower. This means that the bank can recover the outstanding amount from the guarantor in case of non-payment.

Is it possible to remove your name after becoming a guarantor?

If you are a guarantor for someone's loan and now wish to remove your name, certain special circumstances must be met. This can only happen if the loan borrower personally requests the bank to remove your name and a new guarantor is willing to stand in your place. Furthermore, in some cases, you can seek legal advice and, depending on the specific circumstances, remove your name from the guarantor.

You should carefully consider becoming a loan guarantor for someone. If you have decided to become a loan guarantor, you should be aware of the person's financial situation. Furthermore, you should only become a guarantor if you are willing to assume full responsibility for the loan.