Welcome to studentportals.com.ng: Learn Difference Between a Guarantor, Surety, and Referee!
Many people in Nigeria and even in other countries do not really know the difference between a guarantor, a surety and a referee.
Some people think they all mean the same thing, but they do not. If you do not know what each one means, you might find yourself in big trouble later.
My name is Prudent Joshua and today I want to explain this in the simplest way so that you do not make a mistake when someone asks you to stand for them. Whether you are a student, a worker, or even a parent, you need to know this.
Table of Contents
What is a Guarantor?
A guarantor is someone who promises to pay back a debt if the person who borrowed the money does not pay. But it is not that simple. The bank or company must first try everything they can to collect the money from the borrower. They will send reminders. They will visit the borrower. They might even go to court.
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Only when they have done all these things and the borrower still does not pay will they come to you, the guarantor. So, you see, being a guarantor is not just ordinary. It is a big responsibility. You must trust the person very well before you sign as a guarantor for them.
What is a Surety?
A surety is different from a guarantor. When you stand as a surety, you are saying, “If this person does not pay when they should, come straight to me. Do not waste time chasing them up and down.”
This means that once the payment is due and the person does not pay, the lender can hold you responsible immediately. You are equally responsible just like the borrower.
They can come for you and ask for their money at once. So you can see that standing as a surety is more serious than being a guarantor.
Some people have lost their properties because they did not understand what it means to be a surety. Please be careful.
What is a Referee?
Now, let us talk about being a referee. Many people think being a referee means the same thing as a guarantor. But that is not true at all. A referee is just someone who says, “Yes, I know this person. He or she is a good person and has good behaviour.”
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That is all. A referee does not have to pay any debt if the borrower does not pay. A referee is not taking any financial risk. You are only standing to say you trust the person’s character. So, if you sign as a referee, you are only confirming the person is trustworthy, not that you will pay any loan.
Why You Must Be Careful
Every day, people sign papers they do not understand because they want to help a friend, a family member, or even a colleague. Many people do not read the small letters on the agreement form. Some do not even ask questions. Later, they start crying when the bank comes after them.
Before you sign as a guarantor, surety, or referee, ask yourself:
- Do I really trust this person?
- Can I pay the debt if they run away?
- Do I know what the paper is saying?
If you do not understand, ask a lawyer or someone who knows about these things. Do not sign with your eyes closed.
Real Life Lessons
In Nigeria, there have been many stories of people who lost their house, land, or car because they signed as guarantors or sureties for people who refused to pay back loans. Sometimes, it even breaks families apart. Friends become enemies because of unpaid debts.
Do not let anyone, not even your best friend, force you to do what you do not understand. If you know you cannot pay the debt if things go wrong, it is better to say no.
Always Read Before You Sign
As a student or young worker, you might want to help your friend get a loan for a business or apartment. That is good. But always remember:
- A guarantor carries big financial risk.
- A surety is equally responsible immediately.
- A referee is only a character witness.
Read the paper carefully. Ask questions. Make sure you know what your signature means. If you do not want trouble, be wise.
Conclusion
Next time someone asks you, “Please be my guarantor,” “Please stand as my surety,” or “Please be my referee,” take your time. Think well. Do not let love, friendship or emotions put you in debt that is not yours.
Being good is not foolishness. Being wise will save you tomorrow.
Stay wise. Stay safe. Always read before you sign.
Do you have any story or lesson about being a guarantor, surety or referee? Share with us in the comments. Let others learn from your experience too!
