Acting as a loan guarantor can seem like a helpful gesture, but it can significantly impact your financial profile, credit score, and borrowing capacity. By agreeing to guarantee a loan, you take on full responsibility for repayment if the primary borrower defaults. Lenders treat the guaranteed amount as potential debt, which can reduce your ability to secure additional loans and increase your financial risk. Advertisement

A guarantor is legally liable to repay the borrower’s debt if they fail to make repayments. This includes the principal, interest, and any penalties. Even missing a single EMI can trigger the guarantor’s obligation.

While technically anyone can become a guarantor, lenders prefer close family members who meet strict eligibility criteria. A guarantor must satisfy the sa

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