Should you act as Guarantor?

Everyone has dreams and goals. In fact, new dreams spring up with each day that dawns. Many goals and aspirations require funds. It often seems like money has to be spent for anyone’s dreams to ever see the light of day. To reach career goals, buy your dream car, seize investment opportunities, earn academic degrees, people need to spend money. Who has all the money they need to reach their goals anyway? Most people don’t. That’s where borrowing becomes an option.

Sometimes, people receive gift from friends and family, many other times, they just take a loan. Loan, debt, borrowing, etc. raises a lot of questions among Christian youth. Is it a good idea to take a loan? Should I agree to stand as guarantor for a friend? Well, let’s zoom in on that second question and see what the Bible says to a guarantor:

My son, don’t make yourself responsible for the debts of others. Don’t make such deals with friends or strangers. If you do, your words will trap you. You will be under the power of other people, so you must go and free yourself. Beg them to free you from that debt. Don’t wait to rest or sleep. Escape from that trap like a deer running from a hunter. Free yourself like a bird flying from a trap. Proverbs 6:1-5

A guarantor is a person who guarantees to pay for another’s debt if he or she should default on a loan obligation. A guarantor stands to lose something – money or reputation – if the person he guarantees defaults in paying back a loan. This is also known as suretyship. The thing to remember is this: If you agree to stand as a guarantor, you become the point man when the loan cannot be repaid.  

Yes, you are a nice guy, but should you stand as guarantor for a stranger?  You will be sorry if you promise to pay a stranger’s debt. Refuse to make such promises and you will be safe, Prov. 11:15.

Should you stand as guarantor for a friend?  Whether friend or stranger, suretyship can be a snare. It is a decision that requires serious thought. Sometimes, it goes well, your friend repays the loan and everything turns out nicely. Or, it may go bad and you are forced to pay back your friend’s loan. Depending on how much money is involved and how responsible the friend is, this can turn out horribly.

It should not be a sentimental decision, you need to calculate the cost. Not monetary cost, only. Use the following questions as a guide:

1. How well do I know this person?

2. How important is this relationship to me?

3. If my friend defaults, how would it affect our relationship?

4. If my friend defaults, can I afford to pay the debt?

5. Even if I can afford it, what sacrifice would I have to make and what effect will it have on my loved ones?

6. Will the Lord have me do this? (Proverb 3:5-6; you can never go wrong when you allow God lead you).

If you want to stand as a guarantor, never opt for more than you can afford or are able and
willing to pay. Understand that every loan you guarantee is your own debt until the borrower is able to pay back.Guarantor

I know some experts will say your next level is always bigger than your current level so you need to take your chance. My advice; weigh your actions on the balance of the bible, don’t be hasty, look well, ask more questions and read between the lines.


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Ozioma Michaels

Mike is passionate about helping people know the truth, understand why they should believe and practice it in all areas of their personal lives; thereby living out their faith in Christ. His favourite word is ‘conviction’

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