Learn how to write a guarantor letter in Nigeria. If you ever find yourself in a position to stand as a sponsor or reference for someone, then you must know how to write a guarantor letter. The level of distrust and breach of agreement brought about the need for guarantors.
A guarantor may be needed when applying for a job, loan, business deal, contract, etc. To better understand, in this article, we will explain the meaning of a guarantor letter, examples of guarantors, types of guarantor letters, and the steps involved in writing a guarantor letter.
What is a Guarantor Letter?
A guarantor letter is a document that is written by a third party to take responsibility for an individual in the case that there is breach in agreement. The guarantor having understood the terms express their willingness to be held responsible for the party involved. This isn’t just any written document; it is legally binding and can lead to a lawsuit if the individual fails to uphold their end of the agreement. Therefore, all the words in it carry weight and should not be trivialized or when the party breaches the agreement, the guarantor will face the wrath of the law.
Examples of Guarantor
A guarantor is an individual that had known the party for a certain period and not just a stranger. They must have had a level of personal relationship that makes it easy for them to assure others of their personality, qualifications, and other requirements. Also, a guarantor should be 18 years and above. Let’s examine some examples of people that could be a guarantor:
Colleagues
People who have worked closely with the party and can vouch for their skills, dedication, ethics, and professionalism can be a guarantor. This can include a coworker or even a manager.
Personal Contacts
These are those who have a close level of relationship with the party such as family and friends. These people know the party’s character and can attest to their level of integrity.
Academic References
When it comes to people that can vouch for a party’s academic achievements and capabilities, academic references are the best bet. These include lecturers and academic advisors. They have been able to witness firsthand the level of intelligence and dedication the party has.
Previous Employer
Another important guarantor especially for a job applicant is the testament of a previous employer. They are familiar with the dedication, work ethic, and performance level of the party.
Business partner
Having worked on a business venture together with the party such that even financial responsibility is involved, a business partner is another important guarantor. They have experienced the party’s professionalism, work ethics, and reliability and can ascertain that they are who they claim to be.
Types of Guarantor Letters
A guarantor letter can be written for different purposes, so we have different types used in these areas. But, the purpose for writing the letter remains the same regardless of the type; to serve as a sponsor. Here are the types of guarantor letters we have:
Loan Guarantor Letter
This letter is written when a party with insufficient income or credit history applies for a loan. The guarantor will be an individual that has a positive credit history and is willing to assume responsibility for the loan in case the borrower defaults.
Employment Guarantor Letter
This letter is written when a job applicant is in the process of getting hired. The employer requires a guarantor letter to assure them that the applicant is responsible, has the right work ethics, and conduct.
Student Guarantor Letter
This type is used in an academic setting to vouch for the character of the party, who is a student. The guarantor will vouch for the student’s ethical behavior.
Rental Guarantor Letter
Before renting out a property, the owners often require an assurance from a responsible third party, that their property will in no way suffer any damage. This letter is written to assure the owner of a property that the tenant is responsible. However, in the case of damage, the tenant or guarantor is mandated to take responsibility for it.
Steps on How to Writing a Guarantor Letter
There are certain steps in writing a guarantor letter but not to worry, it has the features of the formal letter. Although, in some rare cases, really rare, the format may be informal. However, we will be focused on the more known style and explain it step by step.
Before writing and signing a guarantor letter, you must first review the agreement terms in the document. The responsibility weight of a guarantor letter covers finances and can ultimately lead to legal consequences. So, discover if the terms and conditions are what you can handle. Analyze the relevant information and the agreement. If there is any detail you do not understand, ask a legal advisor to explain to you. Once you are satisfied with the terms, then you can go ahead and write the letter.
Here are the steps involved in writing a guarantor letter:
Your Contact Information and Date
Love every formal letter, a guarantor letter begins with your contact information and date. That is you will write your name, address, phone number, and email.
Recipient Contact Information
After your contact information, slip a line and write the receiver’s details. This includes their name and address. If there are other details applicable, write these as well.
The subject of the Letter
This is a one-line statement that highlights the reason for the letter.
Salutation
This comes after the recipient’s contacts. Don’t forget to skip a line and begin with “Dear [Recipient’s Name].”
Letter Introduction
In the opening paragraph of the letter, State the reason why you are writing the letter first. Then explain your relationship with the party being represented. Here you will mention their name for clarity’s sake.
Relationship with the Party
Also, state your relationship with the party. This is how you know them and for how long. Here is where you get to establish your trust in them based on your relationship.
Declaration of Guarantee
Next is to state your willingness to act as a guarantor and claim responsibility if the individual fails to meet up with their obligations. Let your language be specific and clear and you declare your intention.
Terms and Conditions
State the terms and conditions that will guide the agreement. That is, include the relevant details that will protect your interests and will be agreeable to both parties. This can include a maximum amount of liability, the specific period that you will be held liable and other terms. Ensure the terms are reasonable to both parties.
Contact Information and Signature
Finally, include your contact information, your full name, contact number, and email address. This is to facilitate an established mode of communication in case any field information is required.
Concluding Paragraph
Appreciate the recipient for considering your guarantee and once again reassure them of their competence. Let them know you are available to answer any of their questions.
Formal closing
End the letter with a formal closing, such as “Sincerely” or “Best regards”. This will be followed by your full name and your signature.
Remember to review and proofread the letter for grammatical errors, subject-verb agreement, clarity, and tone before sending it. Also, keep a copy of the letter for record’s sake.
Frequently Asked Questions
What is a guarantor letter for a job?
A guarantor letter for a job is a written document by a guarantor otherwise known as the sponsor or reference, to vouch for a job applicant’s qualifications, character, and capabilities in fulfilling the job roles and responsibilities.
What is an example of a guarantor?
A guarantor for example could be a business partner, former employee, manager, coworker, academic advisor, mentor, or even family and friends.
What documents are required for the guarantor?
The required documents for a guarantor are not fixed, it depends on the context. However, these are some of the common documents that may be requested: means of identification, proof of address, financial information, or personal assets.
Who qualifies as a guarantor?
Although the specific qualifications of a guarantor depend on the organization requesting it, generally every intending guarantor should have financial stability, a relationship with the party, reliability, a positive financial track record, and be older than 18 years of age.
What are the responsibilities of a guarantor?
Generally, the responsibilities of a guarantor include ability to repay debt and provide financial backing if the party fails to meet up with their financial obligations, comply with terms and conditions, and maintain regular communication.
Conclusion
Before writing a guarantor letter, understand that it has implications as you will be mandated to fulfill the responsibilities if the guarantee breaches the agreement terms and conditions. If you have difficulty understanding some terms, reach out to your lawyer for clarity’s sake.
