If you are a guarantor or co-borrower you are legally a party to the contract, alongside the main borrower. You have the same responsibilities as the borrower. You must be sure that, if called upon, you can meet those commitments. If the main borrower defaults, you will be required to meet the terms of the contract with, or ion place of the borrower. It is a serious responsibility. You need to be sure that:
- You can afford and are prepared to make the payments if the borrower does not pay or if anything goes wrong in the carrying out of the contract.
- You need to think about whether you are prepared to meet all the borrower’s commitments if the borrower defaults in any way. Default can include failure to pay, failure the keep the secured item (if it’s a vehicle) legal and safe for the road and fully insured.
- If the worst comes to the worst, you could be taken to court.
Are you prepared to do this?