Becoming a guarantor or co-borrower is huge responsibility. If the other party in the contract can´t repay the loan, you have to repay it yourself. If you can not repay it, your assets (for example your car or house) may be sold to repay the loan.
Before agreeing, carefully consider if you are willing to be a guarantor, and if you can cover the loan yourself if necessary.
Do not feel pressured into going guarantor, even for a family member, if you cannot afford it.
Consumer credit is now regulated by the Australian Government. For more information about the responsibilities of going guarantor visit the ASIC consumer website.
Real life story
Read a real life story about the risks of going guarantor for another person.
Last reviewed 11/04/2013