Educational Loan not paid - Doubts as a guarantor
1 year ago
One of my known person borrowed an educational loan for Rs. 4.6 L and my dad who was a bank employee then signed as a guarantor under the impression that he will pay off the EMI on time without any defaulting. Now, since he did not pay back the loan, they had sent advocate notice to guarantors also. I understood from them (borrower) that they have not agreed yet on any extensions with the bank even after receiving Legal advocate notice. The notice says that they have to pay 7.16 L within 5 days from the date of receipt of notice. I feel it is not going to happen. Now, I would like to know :
What will happen to guarantor if,
1. They (Borrower) are not paying the loan amount within stipulated time as mentioned in notice ?
2. Since the guarantor has a pension + deposit account in the same bank - will there be any problems faced to him ? Pension and deposit is his only livelihood and hard earned money.
3. The borrower is employed in a firm and failed to pay it on time. Can the bank set up easy clearing process from his salary account to loan account ?
4. Is it possible to quit as guarantor from this loan ?
Any feedback will be of great help. Thank you.
My answer are as follows.
1. They (Borrower) are not paying the loan amount within stipulated time as mentioned in notice ?
ANS: Then the bankers can go against your father.
2. Since the guarantor has a pension + deposit account in the same bank - will there be any problems faced to him ? Pension and deposit is his only livelihood and hard earned money.
ANS: Deposit may be attached
3. The borrower is employed in a firm and failed to pay it on time. Can the bank set up easy clearing process from his salary account to loan account ?
ANS: Bank can choose from whom it can recover the loan easily.
4. Is it possible to quit as guarantor from this loan ?
ANS: Your father ought to have filed such application much earlier.
1. If they don't pay then the bank will take legal action against the guarantor in addition to the borrower.
2. Yes there is possibility that bank might put some lien. It has to be seen what did the guarantor agreed for in the loan agreement as a guarantor.
3. No, not possible without borrower's consent
4. Not possible to quit as a guarantor. That is allowed when the loan is ok and the borrower brings someone else to replace to the guarantor.
Here are your answers;
1. If they don't pay then the bank will take legal action against the guarantor in addition to the borrower.
2. Yes there is possibility that bank might put some lien. It has to be seen what did the guarantor agreed for in the loan agreement as a guarantor.
3. No, not possible without borrower's consent
4. Not possible to quit as a guarantor. That is allowed when the loan is ok and the borrower brings someone else to replace to the guarantor.
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