The Bank of Ghana (BoG) has urged the general public, particularly potential loan guarantors to be wary in committing themselves to guarantee loans to borrowers.
The Bank has advised such to first assess the potential creditor to figure out their capacity to repay the loan before signing the undertaking, calling to mind the fact that a guarantor is enjoined to repay the loan if the borrower defaults.
It thus urged the same to go beyond relations with the borrower.
“Do not only depend on the borrower’s word of mouth or barely the relationship you have with them to guarantee their loan.it is your duty to do due diligence. Remember the commitment has legal implications.”
In its six-point notes on financial literacy for guarantors on Tuesday, the Central Bank said a guarantor must be abreast with the nitty-gritty of the loan, advising against rushing and signing.
Before appending your signature, the Bank said one must be “comfortable” with the terms and conditions.
When in doubt about the terms and conditions of the loan, the BoG advises that the potential guarantor seek legal advice.