Let me explain to you what is the role of guarantor in home loan in a simple way. A home loan guarantor provides financial security to the lender by agreeing to repay the loan if the borrower defaults. They don’t share the EMI payments but step in if you fail to repay the loan. They also help if you are close to the lender’s maximum age limit for loan maturity.
What is the Role of Guarantor in Home Loan in India?
As I mentioned earlier, a home loan guarantor plays a crucial role in securing loan approval by offering additional financial security to the lender. They are not co-borrowers but will help you in case you fail to repay the loan. Apart from this, here are some more roles of a guarantor:
A guarantor helps when the loan amount exceeds the lender’s approval limit.
They provide assurance if the borrower’s repayment capacity is weak.
A guarantor is beneficial when the borrower has a poor credit history.
They support applicants nearing the maximum age limit for loan maturity.
If the borrower defaults, the guarantor becomes responsible for repaying the loan.
So having a guarantor increases the chances of loan approval and better terms, but it also places financial responsibility on them if the borrower fails to make payments.
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Purchasing a home is one of the most important financial decisions in life. With the rising property prices, people belonging to the middle-income groups and lower-income groups rely on banks for home loans. While obtaining a home loan every person requires a guarantor. So, who is the guarantor? A guarantor is a person who guarantees to repay the borrower’s debt if the borrower is facing obligations to pay the home loan. Let us learn about home loan guarantor requirements.
Get home loans at the lowest interest rate with minimal paperwork at NoBroker! Calculate your EMI on a home loan using the NoBroker EMI calculator.The guarantor must have passed 18 years of age.
Must be a resident of the country.
As a guarantor, you are bound to repay the loan in case of obligations.
The borrower can choose his or her guarantor but banks prefer borrowers to bring a third-party guarantor.
Lenders ask borrowers to enlist a guarantor when the loan amount exceeds the limit as per the lender policies.
If the borrower’s credit score is weak, the bank needs a guarantor to repay the loan.
If the borrower faced trouble repaying loans in the past he/she will require a guarantor.
If the borrower is about to retire he/she will need a guarantor.
If the borrower does not meet the minimum income requirements he/she will require a guarantor.
I hope you understand when is guarantor required for home loan in India.
This was all about home loan guarantor requirements. I hope you find this informative.
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What is the Role of Guarantor in Home Loan?
Anamika
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2022-07-25T11:34:32+00:00 2025-02-17T16:09:59+00:00Comment
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