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Home Blog Car Loan Guarantor, Should You be One

Car Loan Guarantor, Should You be One

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As the interest rate is in historical low, there will be many people rushing into the market to start borrowing money. Whether it is to finance a new home, re-finance an old mortgate, financing a new car, refinance an existing loan, or even simply just to get some fund for family holiday. Getting loans are not hard given that all documents satisfy the requirements. When these requirements are not met, there are different ways to get the loan approved, and one of them is getting a guarantor. If you were asked to be one, will you?

A guarantor is basically someone who agrees to be the responsible person or entity should the person being guaranteed fails to make any payments. Parents are not uncommon to guarantee their children's Sydney car loan. What about giving loan guarantee for your friends or relatives? There is absolutely nothing wrong helping your friends or relatives with their loans, but before you sign anything you should think carefully, as you are entering a binding law contract.

Some factors that you should take into accounts should you need to be a guarantor:

  • How well do you know the person
  • Is the person currently being employed?
  • How is the emloyment status, is it table?
  • The amount of loan
  • Can you afford the repayments, should the person you are giving guarantee fail to make, or worse can you afford the total payment should this person can no longer afford to make further repayments

There is nothing wrong being a good samaritan, however, always think about the risk that you are getting into in this situations, as it is quite common a guarantor loses his home or other property because of this arrangements.

Ready to get your dream car financed? Give our friendly Sydney Car Loans office a call on 1300 856 846.