Shashank (Executive Secretary) 08 March 2010

Liabilities of Guarantor for House Loan

1. If in case, “Borrower” becomes default

a. Will bank first mortgage the property/house against which “Borrower” has taken loan? or

b. Will bank file suit against “Borrower’s” legal heirs who are residing in the property/house against which the loan has been taken? or

c. Will bank directly file a suit against “Guarantor”?

d. Can “Borrower” himself release “Guarantor” saying he is no more “Guarantor” to my loan?

e. Can “Guarantor” release himself from the loan after knowing that “Borrower” has become default?

2. If in case, borrower passes away in the middle of repayment tenure

a. Will bank first mortgage the property/house against which “Borrower” has taken loan? or

b. Will bank file suit against “Borrower’s” legal heirs who are residing in the property/house against which the loan has been taken? or

c. Will bank directly file a suit against “Guarantor”?

d. Can “Borrower’s” legal heir release “Guarantor” saying he is no more “Guarantor” to deceased “Borrower’s” loan?

e. Can “Guarantor” release himself from the loan after knowing that “Borrower” has deceased?

Regards,

Shashank

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V. VASUDEVAN (LEGAL COUNSEL) 08 March 2010

Neither the Guarantor nor the borrower himself release the guarantor, once the documents are executed and the loan is disbursed. The bank in every case of default has its options to initiate recovery action simultaneously against the borrower and the guarantor and based on the financial capacity can initiate action against guarantor as well. In case of death by borrower, the bank has all the rights including action against the legal heirs of the borrower and/or attachment/sale of the property/recovery from the guarantor

vasudevan