Why Guarantor for a loan?

[msgforsunil]

So, will bank still look for a guarantor, when one has gone for a insurance? Assuming insurance is expected to cover the entire loan amount incase of unforseen death. And I think, none would like to default and only the circumstances would lead to it. For eg. a person losing a job, in such instances, I think bank is gracious enough to understand such situation and accordingly either reduce the EMI or pause the payment till the person gets job.

Any thoughts?

Thanks
Sunil Kumar

[Rahul]

After sub-prime crisis, banks look for more safety, so go for guarantor.

In most common law jurisdictions, a contract of suretyship is subject to the statute of frauds (or its equivalent local laws) and is only enforceable if recorded in writing and signed by the surety and the principal.

In case of fraud bank has only option to get his money back via guarantor. Insurance company won't pay in case of fraud.