On Lendsqr’s admin console, guarantors get charged only after a borrower fails to repay the loan by the due date. First, the system attempts to debit the borrower on their repayment date using the card on file. If this debit fails repeatedly, the system checks for an assigned guarantor on the loan. Once confirmed, the system attempts to debit the guarantor for the outstanding loan amount.
For example, if a borrower defaults on a ₦20,000 loan, and the system can’t recover it, it charges the guarantor. If the guarantor’s card is valid and funded, the loan amount is deducted to recover the loss. However, if the guarantor’s charged also fails, the loan remains in default and moves to collections or legal steps.
That said, if the system can’t process a charged guarantor due to failed card attempts, it flags the loan as defaulted. The charged guarantor feature ensures accountability and encourages borrowers to choose reliable guarantors. A successfully charged guarantor settles the borrower’s outstanding loan, helping the lender recover funds quickly.
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