I got a call today from an old college friend who I had lost contact with a while back. The guy's out of town and can't draw money from his account. I called some contacts in his bank and asked around. It turned out that he's guaranteed a relative's loan and that guy has defaulted so now the bank has blocked his account. I begged and pleaded with the branch manager to remove the block from his account because he's abroad and needs the money. No dice. The branch manager was cold as ice and said "in the past whenever I block his account he manages to convince his relative to come in and deposit something in his account. Why should I remove the block? It works."
I wish to say that this is a unique situation, but it's the second time someone complains to me about a loan they've guaranteed this month. In the past, whenever someone brings up topic in a gathering there were always at least one or two people who had similar nightmare stories to tell
I'm not going to go into details. Just one piece of advice: don't ever guarantee anyone's loan. No matter how much you like the person, how much you trust him/her, how much you like em, whatever. Unless it's your father, mother, spouse or kids.. just stay away from it Don't worry that you might appear rude, or that you're in awkward situation. Unless you're ok with paying off their entire loan, just say NO.
Bad things do happen to good people sometimes. The person you guarantee might be a good guy. But I'm sure it won't be ok with you when his loan installment is taken from your account every month. And it's much worse when the person turns out to be an asshole, like the guy in today's situation who's left his job, taken a better job somewhere else and assigned his new salary to another bank leaving his own blood relative to pay off his old loan for him.