1. What is a Guarantee?
Where a loan of money is made by a person or company such as Jewish Mutual
Loan Co. Pty Ltd. (“Lender”) to another person (“Borrower”) and the lender requires some security that the loan will be repaid it is common for a third person (“Guarantor”) to provide that security by giving a Guarantee. A Guarantee is a document containing a promise by the Guarantor to the Lender that if the Borrower fails to pay any money owing to the Lender then the Guarantor will make the payment.

When do I need a Guarantor/s?
Depending on how much you borrow you will need to have at least one Guarantor (see chart below) and/or a Caveat (see section on Caveats) to secure the loan.

2. How much does a Guarantor have to pay in case of the Borrower’s failure?
The Guarantor has to pay all money owing by the Borrower to the Lender if the Borrower fails to make payment. This may include the amount of the loan, any interest outstanding, and any costs including legal costs which the Lender has had to pay because of the Borrower’s failure.

3.What if there is more than one Guarantor?
Unless the document says that the responsibility of the Guarantors is to be shared in certain proportions each of the Guarantors will be responsible for all monies that may be owing by the Borrower.

4. What happens in the case of death or any other incapacity of the Borrower?
The death or other incapacity of the Borrower will make no difference to the Guarantee which will remain in force. If a failure of the Borrower to make payment is due to the Borrower’s death or incapacity the Guarantor will still be responsible to make such payment.

5. What happens if Guarantor’s situation renders him/her unfit or unable to pay?
The Guarantor will remain responsible to the Lender even if his or her situation is such that he or she would be unable to pay.

6. Is the Guarantee affected by any other security, which might apply to the same loan?
Sometimes more than one form of security is given to a Lender in respect of a loan. Even if this is the situation it will not affect the Guarantee, which remain in force.

7. Can the Lender extend the payment period and release any security?
Yes, the Lender has the discretion to offer extended terms of payment and release any security that is given to it. Whilst any money remains outstanding in respect of the loan the Lender cannot be compelled to grant payment terms or release any security and these matters are entirely in the discretion of the Lender.

8. How long does the Guarantee remain in force?
The Guarantee will remain in force whilst any money is owing by the Borrower to the Lender unless:
a) There is any change to the law which might affect the Guarantee; or
b) The Lender agrees to release the Guarantor.

• Please note that once the loan has been approved, the Guarantors will be required to sign a further legally binding Guarantor statement.

I have read the above Explanatory Notes and fully understand the implications of signing the formal Guarantee