Awareness of the Rights of Credit Facility Guarantors

In the interest of protecting the rights of guarantors, Arab Bank provides the following information regarding the guarantor’s rights, in addition to essential matters the guarantor should be aware of.

Who is the guarantor?

The guarantor is the person who fully undertakes to repay the loan amount or any other credit facility amount in case the borrower/debtor fails to meet their obligation and pay the installments due to the bank on time.

Guarantor rights:

• Receiving a certified copy of the contracts and documents related to the credit facilities after they are signed by the borrower and the guarantor.
• Reviewing all contract terms and receiving sufficient clarifications.
• Notifying the guarantor of the borrower’s default and not deducting any amounts from the guarantor’s account until 30 days after notification, while the bank retains the right to take appropriate action to reserve the installment amount until the notice period ends.
• Obtaining the guarantor’s approval when postponing any installment of the credit facility they guarantee.
• Removing the mortgage mark from the guarantor’s mortgaged assets once the borrower has fully settled their obligations to the bank.

Essential matters the guarantor must be aware of:

• Signing the loan contract or any other credit facility documents as a guarantor binds you to all obligations of the original borrower.
• The guarantee does not end upon death, and heirs may be held liable up to the value of the inheritance.
• The guarantee requires that you understand the loan or credit facility terms, installment amount, loan or facility duration (which is the duration of the guarantee), and your direct and indirect obligations.
• The borrower’s inability to repay the loan or credit facilities negatively affects your credit rating as a guarantor and limits your ability to borrow until outstanding installments are paid.
• If the borrower fails to pay, the bank has the right to deduct the unpaid installment from your salary or entitlements as a guarantor. If there is more than one guarantor, the installment is deducted equally and/or proportionally to income.
• The guarantor’s end-of-service benefits (if the guarantor is an employee) may be reserved by the bank if the borrower defaults.
• The bank has the legal right to request attachment of the guarantor’s movable and immovable assets.
• It is understood that spousal guarantees carry the same implications as guarantees by any individual, and remain valid until all obligations are settled, regardless of whether the marital relationship continues or ends at any time after signing the contracts.

   

  Reasons that may lead the borrower to fail to pay installments:

  • Loss or decrease of the borrower’s income source.
  • The borrower’s refusal to pay installments.
  • The borrower’s business difficulties and inability to pay installments.
  • The borrower’s obligations exceeding their income level.
  • Leaving employment for various reasons.
  • Death of the borrower.

  Risks of the guarantor’s failure to pay the borrower’s due installments:

• Salary deductions, withholding entitlements, and legal actions to obtain a judicial decision against the guarantor, including attachment of movable and immovable assets, as well as detention orders.
• Negative impact on the guarantor’s credit rating, affecting their ability to obtain credit facilities from banks or lending institutions.
• The guarantee does not end upon death, and heirs may be held liable up to the inheritance they receive.

For more information or inquiries, you can contact the Customer Care Center at 022953333.