Guarantor

Becoming a guarantor carries significant risks: (1) CIBIL impact — the loan appears on your CIBIL report; any default by the borrower damages your credit score; (2) Legal liability — if the borrower defaults, the lender can sue you for the full outstanding amount; (3) Loan eligibility impact — the guaranteed loan is counted in your own FOIR when you apply for loans; (4) Asset risk — if you have pledged personal assets as guarantee, they can be seized. Never be a guarantor unless you trust the borrower completely and can afford to repay the loan yourself.

Removing a guarantor mid-loan is possible but difficult — the lender must agree, and typically requires a substitute guarantor of equal creditworthiness. Alternative: the borrower's income/CIBIL improvement may allow the lender to release the guarantor. Best time: when the loan is 50–60% repaid and the borrower has demonstrated strong repayment history. The process requires a formal request to the bank, credit re-evaluation, and potentially new loan documentation.