Loan default by Loan Borrower
2 years ago
I have placed my self Guarantor to one person for personal loan from Bank and he has not paid the amount and now bank has blocked amount in my bank account. Bank is insisting to pay me the balance amount. Please let me know what legal options I have to come out of this.
A.Hi,
In case the primary borrower defaults on loan repayment, the liability to pay the outstanding amount falls on the guarantor of the loan. The guarantor can face legal action for non-payment of the outstanding loan amount. It is advised that you settle the loan with the bank.
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In case the primary borrower defaults on loan repayment, the liability to pay the outstanding amount falls on the guarantor of the loan. The guarantor can face legal action for non-payment of the outstanding loan amount. It is advised that you settle the loan with the bank.
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Ayantika Mondal @ Prime Legal
Responded 2 years ago
A.Hi,
The guarantor takes the responsibility that if in any scenario, the primary borrower fails to pay the equated monthly instalments (EMI) of the loan, then the guarantor will assume full repayment responsibility. Therefore, you are legally liable to pay the loan amount along with interest and any penalty.
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The guarantor takes the responsibility that if in any scenario, the primary borrower fails to pay the equated monthly instalments (EMI) of the loan, then the guarantor will assume full repayment responsibility. Therefore, you are legally liable to pay the loan amount along with interest and any penalty.
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Sidhaarth
Responded 2 years ago
A.Guarantor has equal liability towards bank as the borrower has to repay the loan amount with cost and interest so being guarantor you are liable to repay the loan amount with interest and cost. Since your person is not paying hence bank has every right to block your account so as to ensure payment of loan. Ask the person to repay the loan or atleast settled with bank like OTS etc.
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