Credit Term

Guarantor

Someone who legally promises to repay a loan if the borrower cannot. Standing as a guarantor is a real financial commitment — the loan can appear on your own credit record and you can be pursued for the debt.

When you guarantee someone's loan, you agree to be legally responsible for it if they default. The commitment can show up in your CCRIS record as a contingent liability, which means it can affect your own DSR and your ability to get credit, because lenders see that you might have to cover someone else's debt. If the borrower stops paying, the lender can come after you for the outstanding amount.

Malaysian law does give some protection: under the bankruptcy rules, a 'social guarantor' — someone who guarantees a loan for education, a personal loan for non-business purposes, or a housing loan for their own or family use, without benefit to themselves — cannot be made bankrupt by the lender, though they can still be sued for the money. Before agreeing to guarantee anyone, understand exactly what you are signing, because it can limit your own borrowing for years.

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