Guarantor

A guarantor is a person who agrees to take legal responsibility for repaying someone else's debt if that person fails to meet their repayment obligations. By signing a guarantee, the guarantor becomes jointly liable for the loan — meaning the lender can pursue the guarantor for the full outstanding amount if the primary borrower defaults.

In South Africa, guarantors are commonly required for:

• Home loans where the applicant's income or credit score falls short of the lender's requirements
• Vehicle finance for first-time or young borrowers
• Personal loans for individuals with a limited credit history
• Student loans where the student has no independent income

Being a guarantor is a serious financial commitment. If the borrower misses payments, the guarantor's own credit score and financial position are directly affected. The lender can issue a judgement against the guarantor, apply for a garnishee order against their salary, or pursue sequestration of their estate — exactly as they would against the original borrower.

Under the National Credit Act, a guarantee linked to a credit agreement is itself a credit agreement, which means the guarantor has the same rights as the borrower — including the right to receive full disclosure of the loan terms before signing.

Before agreeing to be a guarantor, always: obtain a copy of the full loan agreement, understand the total exposure (the maximum amount you could be liable for), and consider what would happen to your own finances if the borrower stopped paying tomorrow.