Before You Leap As Guarantor

I received a call from my dad this morning
saying that finally he decided to get the
ISUZU DMAX. He is self-employed and
consider his age nearly 55, the bank
required him to get a guarantor for the
hire-purchase contract.

I used to have a wrong definition regarding
guarantor until I read an article recently.
Guarantor is more than just a prove of
good character to someone. We ought to
know the obligation and rights for a
guarantor before we agree and sign on
the agreement.

WHO CAN BE A GUARANTOR?

Anyone can be a guarantor as long as
the person can meet the legal requirements
to be a guarantor. However, since a guarantor
would be liable to pay the debts of the borrower
in the event the borrower defaults, you
should consider becoming a guarantor only
if you are sure that you can pay the debts of
the borrower in the unfortunate event that
he/she fails to do so.

The legal requirements of a guarantor include
the following:
• Must be 18 years old or above
• Must not be a bankrupt
• Must be of sound mind and have the mental
capacity to understand the guarantee document
and the responsibilities and obligations of a guarantor
• Must have freely consented to being a guarantor
(i.e. should not have been forced or must not have
entered into the contract under undue influence,
fraud, misrepresentation or by mistake)

To apply as a guarantor, he/she needs to provide
the finance institution with the following
documents:
1. Copy of I.C and driving license
2. Latest three months' salary slip
3. Latest three years' Form J and EA Form
4. Copy of bank statement or savings passbook

Nevertheless, the final decision whether or not
to accept you as a guarantor lies with the
financial institution. Click here for more
information on hire-purchase and here on guarantor.