Private College Student Loan

SBI education loan?

A friend of mine has secured an education loan from the State Bank of India to study engineering in USA. I am a green-card holder living in the US and he wants me to stand guarantee. Questions: 1) Will his margin money be waived if I stand guarantee? 2) What documents do I need to provide to SBI with the guarantee letter? 3) Can SBI hold me responsible even though his parents in India have shown sufficient collateral to have the loan approved? 4) Can a sibling in the US provide guarantee or can it not be a close relative? 5) Anything else (esp. risks) I should know about before agreeing to stand guarantee? Thank you.

Public Comments

1. If you stand guarantee the bank will ask you to pay back the loan in case your friend defaults. They just want to improve the probability in getting their loan back. What you can do to minimize the financial risk for you: * Don't stand guarantee * Ask the parents to provide you with the proper guarantees that they will cover if their offspring defaults. * Ask SBI if somebody closer related to the debtor could stand guarantee and suggest this as solution to the family. * Stand guarantee if you can accept the financial risk and think the social risk when refusing is too big.