If you have become a guarantor, that means you’ve been generous and probably helped someone to achieve some important aspects in their lives. However, this kind and good deed mean that you are burdened with a heavy responsibility of repaying back the debt if the borrower fails to do so. In fact, whether you are capable of repaying the given money at the time or not, you will come first if the borrower quits repaying and if you also fail to repay it, your Cibil score will decrease significantly. You might consider canceling guarantor agreement since this might prevent you from getting credit at the moment when you need it. These reasons often pressure people to consider opting out of being the guarantors. This, however, is not so easy to do without getting in legal troubles, but there are some ways for safe canceling guarantor agreement.
The procedure of canceling guarantor agreement
If you decide to stop being a guarantor, the option of settling it personally with the borrower is not allowed. You have to contact the lender directly and submit an application to be relieved. You have to state and prove your reasons for opting out, and the mere outcome is solely up to lender’s decision. If you succeed in opting out, the bank will provide you a discharge letter and you will no longer be obligated to compensate for the debt. Here are some options you can use as the valid reason to quit being a guarantor.
Repayment by borrower or substitute guarantor
These two methods have the greatest chances of being accepted by the lender and unburden you from liability without damaging your Cibil score. Considering the fact that you are probably in close relation with the borrower, you should analyze the ways to convince him to repay the debt himself. Either by creating an extra source of profit to him or by asking other friends and relatives to support him. If the borrower repays the debt timely, you’ll be safe from being charged immediately after the deadlines expire. The other way is to find substitute guarantor. Generally speaking, the lender is primarily interested in getting the debt repaid, how and who exactly is going to repay it is less important. If you manage to change the seats with another guarantor, the chances are the bank will release you willingly.
Rely on legal tricks
There are, also, some useful options based on legal alternatives you may test when opting to quit being a guarantor. State and prove to the lender that the borrower has taken an additional loan aside the one you are guaranteeing for, but the second one was taken without your consent. Also, you can submit the application to the bank stating that there were no signs that borrower will avoid repayment at the moment when you signed the guarantor’s agreement. These options are slightly vague, but sometimes bank takes them as a valid reason to release you or at least to cut you some slack.