Guarantors can be attached to a loan account to take on the legal responsibility to repay the loan if the borrower fails to do so. Three types of guarantors are supported:

• Existing client guarantors - Use another client as a guarantor
• External guarantors - Add a person who is not a client as a guarantor
• Group savings account guarantors - Use funds from a group savings account as collateral

Savings account guarantees and liens

When a savings account is used as a guarantor (collateral), the system automatically creates a lien (guarantee hold) on the account:

• The guarantee amount is held in the savings account, reducing the available balance
• The hold is created automatically when the loan is disbursed
• As loan payments are made, the held amount is gradually released
• The account holder can view all liens in the Liens tab of the savings account
• Unlike manual holds, guarantee liens are managed automatically by the loan system

For more information about how automatic liens work, see Liens.

After authenticating, you can:

• Create guarantors - Add guarantors to loan accounts
• View guarantors - Review guarantor details for a loan
• Remove guarantors - Delete guarantors from loan accounts

Guarantors are managed in the Guarantors tab of the loan account.

Related Topics

• Liens - How automatic guarantee holds work
• Viewing liens - See all holds and liens on a savings account
• Loan applications
• Approving loans
• Groups