My son took an education loan two and a half years ago. I stood as guarantor for it. Its moratorium period ended last month and my son has started servicing it. If he defaults, will my credit history be impacted ?
Standing guarantor is an act of responsibility and risky, as you cannot predict someone else's repayment behaviour. Mostly, people request close friends and relatives to stand as guarantor, so it becomes difficult to refuse, but the likelihood of landing in a soup increases. Therefore, make sure you know about the borrower's financial capabilities.
Because, in case of default, the guarantor will have to fulfil the borrower’s obligations. Credit bureau records do capture details of the guarantor and his credit history gets impacted in the case of a default. Also, you cannot revoke guarantee after the loan has being sanctioned. So, before signing, check if the contract tells the sum you are guaranteeing, the circumstances of repayment and if the borrowed sum can be increased without you being told.
I have a credit card bill of overRs 75,000 pertaining to the past five months. I have been paying the minimum balance. The bank's agents insist on repayment now. However, I can't at the moment, even if the bill is converted to equated monthly instalments. What options I have if I approach the bank?
As long as you are paying the minimum amount due every month, agents cannot ask you for additional amount, unless you have breached credit limit. This can happen only if you have not been paying the minimum amount.
Meet the manager of your bank and hand him a complaint in writing. If the problem persists, escalate the complaint to the bank’s nodal officer. If you still face problem, approach the banking ombudsman of RBI of your area after 30 days.
The writer is senior vice-president and group head, retail strategy and branding at Arcil. Views expressed are his own. Send your queries at yourmoney@bsmail.in
