The guarantor needs to know the reason and purpose of the lender for taking the loan so that the borrower is liable to them. At the same time it is ascertained whether the borrower can repay the loan taken or not. Before becoming a guarantor the terms of the loan agreement should be well known and understood. If the borrower fails to repay the loan the guarantor will be obliged to repay it consider whether you can afford to pay that amount.