Suretyship

Guarantor risks and obligation overview

Details

  • What a guarantor owes

    The whole debt + interest + penalties + costs — if the borrower defaults; salary/property can be seized.

  • Types

    Joint — the bank can demand all from the guarantor; subsidiary — the borrower first, then the guarantor.

  • How to exit

    Usually — no exit until repayment; sometimes — guarantor substitution or bank consent; death/bankruptcy — heirs within the estate.

  • Before signing

    Read the contract: subject, term, amount, liability type; 'just a formality' doesn't exist.

Suretyship is your loan, just without the money. A bank asks for a guarantor not because 'it's fine' but because there's risk. Guarantee only what you'd borrow yourself.