What is a loan guarantee? How does it work?
What is a loan guarantee?
A loan guarantee provides insurance or protects you if your friends and family default on their loan with you. We are building partnerships with nonprofits and businesses that extend loan guarantees to their constituents. If you are part of a loan guarantee fund, you would have received communication from the organization or company you are affiliated with. If you are not currently part of a loan guarantee fund, don’t worry—we are working on building more partnerships to extend this to others.
How does my loan guarantee work?
Several types of loan guarantee funds are available. The partner you are affiliated with has set up the fund specifically to meet your needs. Generally, loan guarantees protect you against default.
When you make loans to friends and family, if they cannot repay you, Giving Credit and the partner will pay you back up to the loan guarantee limit. If you are part of a fund, this is how to use it:
When you log in, you should see a loan guarantee credit from the partner.
Let friends and family know how much they can borrow from you if they ever need a loan.
Track loans you make to friends and family (and encourage them to give you credit too!)
If your friend or family member defaults on your loan, you will receive a payment from Giving Credit and the partner up to the loan guarantee amount.
If you have further questions, contact your partner organization or message us.
