Guarantor Rights, Liabilities and Dangers

Slide 1: Malaysia Home Loan: Guarantors HOW WELL DO YOU KNOW GUARANTOR METHODOLOGY AND REGULATIONS? FISCAL-WISE WWW.FISCAL-WISE.COM.MY

Slide 2: What is a Guarantor?  Person who agrees to indemnify the holder of a loan all (borrower) or a portion of the unpaid principal balance in case of default by the borrower. Borrows Financial Guarantor Borrower Money to Institution

Slide 3: Being a Guarantor?

Slide 4: Liabilities of a Guarantor  Be held liable for liabilities of a borrower in accordance to the contract.  Be requested to pay only if borrower defaults payment and financial institution calls upon the guarantor.  The extent of the liability of a guarantor will be as specified in the guarantee document.

Slide 5: Guarantor Limitations Guarantor Discharges Action Limitations  After full payment of  No action taken to the guarantor until a demand debt, including taxes for action under the and interests. guarantee has been made.  Terms of guarantee has  A demand may be served to be adhered to by the by hand, post or courier. financial institution to  Financial institution has enforce guarantee 6 years from the date of first demand to take legal against the guarantor. action against guarantor.

Slide 6: Common Problems  Legal terminology too difficult to understand. Solution: Seek legal advise/consult banking officer. Questioning liability for increase financial facilities.  Cannot happen without guarantor’s consent. Signature witnessing: Who should be?  Financial officer, spouses are not allowed without independent advise. Bankruptcy: Can I be made if borrower defaults  payments? Yes. Death of the borrower. Is the guarantor discharged?  No. If the borrower cannot finish paying, the guarantor bears the cost.

Slide 7: Thank you TOPIC: MALAYSIA HOME LOAN GUARANTORS WISE Home Loans HTTP://WWW.FISCAL-WISE.COM.MY/ HTTP://MALAYSIAHOMELOAN.BLOGSPOT.COM/ HTTP://HOMELOANCALCULATORS.BLOGSPOT.COM/