Someone else will fill someone else, be careful before becoming a guarantor for friend and relatives

Loan guarantor: Many times a close friend or family member needs to take a loan, then we become guarantors without any hesitation. If you also do this, then be careful immediately, otherwise doing so can be heavy on you.

Becoming a guarantor means that you are guaranteed to repay the loan being taken. If your credit rating is good, then considering you a guarantor, a loan is also passed without any inattention.

Your credit score can go wrong

Now the responsibility of the person taking the loan is to pay the loan installments with interest from time to time. If he is unable to do so, then the first notice is sent to the guarantor as a defaulter and they are expected to get the loan amount.

This default can also affect your credit score, so before becoming a guarantor, it should always be kept in mind that the person you are becoming guarantors, you know well and you are so confident that they are able to pay loans on time. If your credit score goes wrong, then in the coming time you may have trouble taking loan or you may get a loan at a higher interest rate.

You will be responsible

It is not so easy to become a guarantor because the bank will count this loan in your total credit limit. If a person borrowing in a situation is called bankrupt, even if he is exempted from repaying the loan, the guarantor will have to pay the entire amount with interest. It is also not easy to get back from becoming a guarantor, when the loan is completely paid or the bank does not give a discount in writing.

Benefits of becoming a guarantor

However, becoming a guarantor also has some benefits. One, it helps someone close to you. It may be that your credit score will also be upgraded. If you become a guarantor for a responsible person and he repays the loan on time, then it will affect your credit score. In such a situation, if you want to become a guarantor for someone, then you should be of course, but keep checking your credit score from time to time or take advice of an expert.

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