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Guarantees
Sometimes if you are borrowing money the lender might require another person (such as your parents) to guarantee the loan. If they do so they are known as a guarantor. The effect of being a guarantor is that the guarantor stands in the place of the borrower should the borrower default on the loan.
The nature of the guarantee will:
- vary depending on the circumstances
- usually remain in place for the life of the loan which may be many years.
A guarantor should:
- obtain good independent advice
- understand the effect on them should the borrower default
- satisfy themselves that they have the resources to honour the commitments contained in the guarantee
- consider fixing the maximum amount for which they might be liable
- ensure their liability cannot be increased
At Hart Brown we advise potential guarantors about the risks involved and their options. Not all proceed with the giving of the guarantee.
We will help you cut through the jargon and make sure you fully understand what you are being asked to do.
To speak to someone who can help with guarantees call, email or request a call back from one of our specialist lawyers.