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Are co-makers of a bank loan liable to pay in case the maker fails to pay?

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Yes, co-makers of a bank loan are generally liable to pay the loan in full if the primary maker defaults on the loan. This means that the bank can pursue the co-maker for the entire outstanding balance if the primary borrower fails to make payments.

The liability of a co-maker is a significant commitment. They are essentially guaranteeing the loan. Their creditworthiness is often considered; their credit score can be negatively impacted if the loan goes into default.

The specifics might vary slightly depending on the jurisdiction and the terms of the loan agreement, but the general principle is that co-makers share the responsibility for repayment. The bank can pursue either the primary borrower or the co-maker for the outstanding debt.

It is crucial for anyone considering becoming a co-maker to fully understand the implications before signing the loan agreement. They are accepting a substantial financial risk. They should carefully review the loan documents, understand the terms of the loan, and fully assess their ability to repay the loan should the primary borrower default.
 
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