For the week ending 17 October 2009 / 28 Tishri 5770

Guaranteeing a Loan

by Rabbi Mendel Weinbach zt'l
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Question: A friend of mine who is taking a loan from a Gemach (Free Loan Fund) has asked me to serve as a guarantor. I have never guaranteed a loan out of fear that the borrower will default on payment and I will be stuck with paying the loan. What is the right thing to do?

Answer: It is a mitzvah and a great act of kindness to lend money to a Jew in need. If you lack the funds to serve as the lender the next best thing is to enable him to get a loan through your guarantee.

A word of caution!

Never guarantee more of a sum than you are prepared to lose. Your friend may be the most reliable person but circumstances beyond his control may prevent him from repaying the loan, so make sure that you don't take on more than you can handle.

A word of comfort!

The people running Free Loan Funds can assure you that it is not very common for guarantors to get stuck with the bill.

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