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Mar 17 2017

Do Not Guarantee

It is foolish and dangerous to guarantee for some person who borrowed money from bank. In life, we do not know what will happen to us tomorrow. How can we guarantee for the future of other people.
To guarantee for someone is to put our destiny at the hands of other people. If others fail in financial difficulty, you will be hold responsible for whatever amount you guarantee. You have to pay all debt of the person whom you guaranteed.
In our life, our children, relative, friends may borrow money from bank. In many cases, those people will ask us to make a guarantee. In such case, it is better not to guarantee and instead, to help them some amount of cash which will give you no consequence afterwards.
Guarantee is terrible for an unknown consequence which may bring to you. Even so close as children, it is better not to guarantee for them. If you do not help, it will do good to make them strong in independence. But, if you help, their abilities will be weak, similar to build a house on the sand which will be blown away by waves at any time of a storm.
Even somebody buy a house, but bank still needs a guarantor. You think to guarantee in such a condition is of low risk. But, actually it is not so. First, property price may drop below borrowing value. Second, the borrower may fail to pay installment and, after two month failure in payment, bank will auction the property at very low price, thus causing you to pay the difference between borrowing money and auction value.