Points To Consider Before Becoming A Home Loan Guarantor - Loan Trivia


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Monday 30 May 2022

Points To Consider Before Becoming A Home Loan Guarantor


Home Loan Guarantor

As a home loan guarantor, one sure leverages the eligibility of the primary borrower for better terms on the advance along with other benefits. Becoming a guarantor, however, impacts one’s individual profile as well and affect his/her financial status. It is thus essential that one considers a few crucial aspects when agreeing to be a guarantor for a home loan.

  1. Guarantor type

A home loan guarantor can either be just a signor to the loan agreement or agree to share the loan liability as well, in which case he/she would need to make repayments as well. The latter commitment can necessarily block a chunk of your finances for the entire home loan tenor. 

On the contrary, making such repayments comes with home loan tax benefits, which the guarantor can claim every year.

  1. Impact on loan eligibility for oneself

Since becoming a guarantor creates loan liability, and if contributing, restricts your finances as well, it also impacts your eligibility for loans and advances. Keep this in mind and use a home loan eligibility EMI calculator to assess the impacts before deciding.

Read Also: Things You Should Know About Tax Deductions on a Home Loan

  1. New obligations created

While becoming a guarantor enables one to meet home loan eligibility criteria conveniently, it creates new obligations as well. You must keep a plan in place to manage these obligations and take wise financial decisions accordingly.

Home loan can be great financing options with tax deduction benefits as well as subsidy benefits through PMAY backing. Make the most of these advantages by remaining well-informed.

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