Answer Book question
Only if you are willing and able to repay the entire loan yourself, because legally that is what you are agreeing to. A guarantee is not a character reference; it is a debt. Many Kerala families have lost houses to guarantees signed for relatives' businesses that failed. If you cannot afford the loan, you cannot afford to guarantee it.
Only if you are willing and able to repay the entire loan yourself, because legally that is what you are agreeing to. A guarantee is not a character reference; it is a debt. Many Kerala families have lost houses to guarantees signed for relatives' businesses that failed. If you cannot afford the loan, you cannot afford to guarantee it.
A man guarantees his brother-in-law's ₹20 lakh business loan. The business fails; the brother-in-law leaves for the Gulf. The bank recovers from the guarantor, who sells land to pay.
A guarantor is co-liable. Default by the borrower triggers recovery from the guarantor, and the guarantee appears in your credit report, reducing your own borrowing capacity.
Can you repay the full amount? Will this block your own borrowing? Is the borrower's plan validated? Is there a limited or partial guarantee option? What is the relationship cost of saying no vs. of losing the money?
Signing because refusing is awkward.
Family guarantees are a leading cause of asset loss in Kerala households. Say no kindly; offer help that does not risk your home.
Guarantee ₹20 lakh → borrower defaults → guarantor pays ₹20 lakh plus interest.
If you could comfortably absorb the loss and want to help, it is your choice. with eyes open.
Decide whether you could pay it all If not, decline Offer non-financial help instead
My son wants money for a business. Should I give it from my retirement savings? What happens to my home loan if I die?
Family support
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