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August 25, 2022
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In some cases, financial institutions require borrowers to secure their loans with a guarantor, particularly for those who are not eligible due to credit history or lack of security collateral. Lers such as licensed moneylers may also necessitate this additional guarantee before approving the loan application in Singapore.
A loan guarantor assumes responsibility for paying off another person's debt if they fl to fulfill their obligations. If a borrower falls behind on payments, you, as the guarantor, will be held accountable for repaying the outstanding amount.
To qualify as a loan guarantor in Singapore, one must meet several criteria:
Singapore Citizenship or Permanent Residency: The individual must either be a citizen of Singapore or possess permanent residency status.
Age Requirement: Must be 21 years old and older to assume the role of guarantor.
Not in Bankruptcy Proceedings: An individual cannot become a loan guarantor if they are currently an undischarged bankrupt.
Once you agree to serve as a guarantor, understand that your commitment lasts until the debt is fully settled or discharged:
Principal Debtor Clause: If such a clause exists in the agreement, the ler considers you responsible for both parties’ debt repayment. Even if the borrower escapes liability, you remn accountable.
Payment on Demand: You are legally obligated to repay any outstanding balance immediately when requested by the ler, without proof of attempting recovery from the primary debtor.
Restructuring and Continuing Security: Your obligations as a guarantor remn in place even during loan restructuring or if security measures are added.
Subordination: After settling up with the borrower, you cannot seek remedies agnst them that prejudice the ler's rights. You must exhaust their resources before pursuing other options.
Concurrent Remedies: The ler may pursue recovery actions agnst both you and the borrower at the same time.
Set Off: Any amount held by the ler may be deducted to offset the outstanding loan balance.
Repayment Capacity: Evaluate your own financial standing before agreeing to guarantee someone else's debt. If you are unable to pay, you could also face severe consequences.
Official Contract Documentation: Ensure that you receive an official copy of the loan contract document from the ler detling:
Loan amount
Interest rate
Tenure
Maximum repayment amount
Administrative fees
Late fees and interest for delayed payments
The requirements for becoming a loan guarantor in Singapore are strghtforward, but the responsibilities that come with it should not be underestimated. Anyone who meets the eligibility criteria can fulfill this role as long as they are an adult citizen or permanent resident.
However, acting as a guarantor involves significant legal and financial obligations, necessitating careful consideration before accepting any such requests.
Elite Investment Credit is renowned for its customer-centric approach and competitive loan options with flexible terms in Singapore. Should you require financial advice or assistance, our knowledgeable team will be glad to guide you through .
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Saturday: 11:30 AM to 7:00 PM
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For further assistance or to explore loan options with us, feel free to contact our team. We're here to help you achieve your financial goals efficiently.
The revised version mntns a professional tone while streamlining the content into clear, concise paragraphs for better . The structure now organizes information logically, starting with an overview before diving deeper into specifics and concluding with practical advice on contacting Elite Investment Credit.
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Requirements for Loan Guarantor in Singapore Guaranteeing a Debt in Singapore Financial Obligations of a Guarantor Eligibility Criteria for Guarantors Responsibilities as a Loan Guarantor Process to Become a Guarantor